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Trump’s Victory: Implications for Global Corporate Credit Ratings Across Sectors and Regions
The election of Donald Trump, as discussed by Prof. Dr. Jan Viebig of ODDO BHF SE, carries significant implications for the credit ratings of companies across different countries and sectors. His policies, characterized by a shift toward protectionism, corporate tax cuts, and deregulation, are likely to have distinct effects on credit stability, particularly impacting European industries that…
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Trump reloaded
According to the first official election results, Donald Trump is the clear winner of the 2024 presidential election. This means that the USA is facing an extremely critical turning point in its history. “Now the exact scenario that we have already predicted several times is occurring: America is on a direct path to autocracy,” says Dr. Heinz-Werner Rapp, founder and director of the FERI…
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Landmark Ruling Strengthens Rating Agencies' Role in Assessing Bank Creditworthiness
The recent judgment by the Federal Court of Justice (Bundesgerichtshof, BGH) in the case surrounding Greensill Bank underscores the significance of rating agencies in assessing a bank’s creditworthiness. The case, involving a municipality’s lost investment, highlighted the role of financial service providers and affirmed the reliance on ratings from established agencies as primary indicators of a…
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Moody’s Reports Record-Breaking Third Quarter 2024 with Strong Revenue Growth and Raised Earnings Outlook
Moody’s Corporation delivered outstanding results for the third quarter of 2024, highlighting the company’s resilience and ability to capitalize on favorable market conditions. Revenue for the quarter surged by 23% compared to the same period in 2023, reaching an impressive $1.8 billion. This growth was driven largely by the stellar performance of Moody’s Investors Service (MIS), which saw its…
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The Growing Role of AI in Financial Markets: Implications for Rating Agencies Relying on Artificial Intelligence
OpenAI has been at the forefront of the artificial intelligence (AI) revolution, significantly capturing public attention with the release of its language model, ChatGPT. Now, OpenAI is on the brink of another significant transformation: its shift toward becoming a profit-driven entity. As reported by Brice Prunas, portfolio manager of ODDO BHF Artificial Intelligence, OpenAI is poised to expand…
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DekaBank Partners with Scope: A Long-Awaited Milestone for a Berlin Rating Agency
In a recent announcement, Deka, the securities services provider of the German Savings Banks Finance Group (Sparkassen-Finanzgruppe), revealed its decision to fully integrate and use Scope’s credit ratings across its operations. This development might be seen as an impressive achievement for Scope, but it also raises a critical question: why does the news of securing a major German client seem…
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Moldova Receives 'B+' Rating with Stable Outlook from Fitch Ratings
Fitch Ratings has assigned the Republic of Moldova a Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘B+’ with a Stable Outlook. This rating highlights the country’s steady commitment to maintaining macroeconomic and financial stability through prudent fiscal policies, a credible inflation-targeting framework, and a flexible exchange rate regime. These factors, combined with a resilient…
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Rating does not protect against deception
Deutsche Konsum REIT-AG is not only causing concern for the financial regulatory authority but also for a rating agency. The Berlin-based rating agency Scope Ratings had praised the company’s creditworthiness with good ratings. However, these historical ratings must now be reviewed because the German Federal Financial Supervisory Authority (BaFin) has determined that the individual financial…
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Opportunities and Risks for Moody's Following the Acquisition of Praedicat
Moody’s Corporation, a prominent player in financial services and risk assessment, has recently announced its acquisition of Praedicat, a leading provider of casualty insurance analytics. This strategic move marks a significant expansion in Moody’s capabilities within the insurance sector, promising both notable opportunities and potential risks. Opportunities Enhanced Risk Assessment…
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Investing in Safe Assets: A Focus on Scandinavian Bonds
In today’s increasingly appealing interest rate environment, investors should focus more on “safe assets,” says Jan Schopen, Portfolio Manager and Analyst with the Global Fixed Income Team at Lazard Asset Management. While German government bonds, covered bonds, and other core European bonds remain viable, Schopen identifies another attractive option: high-quality bonds from…
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Moody's gives away EU market share for free
The decision by Moody’s to cease endorsing ratings of US municipal bonds for use in the European Union (EU) has led to significant implications for the market shares of credit rating agencies (CRAs). This move resulted in the removal of approximately 290,000 sovereign ratings from the ESMA RADAR database, thereby causing a notable reduction in the total number of outstanding ratings in early…
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One of the Most Turbulent Summers in Recent Financial History
The summer of 2024 will be remembered as one of the most turbulent in financial history. A series of unsettling events began in July when doubts about the AI hype and sector rotations started to shake the markets. This instability continued through August, culminating in significant disruptions across global financial markets. A key catalyst for this turbulence was the unexpectedly restrictive…
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Potential Implications of the U.S. Presidential Election on Stock and Bond Ratings
The upcoming U.S. presidential election presents a pivotal moment for the country’s economic future, with significant implications for stock and bond ratings. The election pits Kamala Harris, representing a more progressive economic agenda, against the incumbent, Donald Trump, who champions a business-friendly approach. Both candidates’ policies could influence the trajectory of national debt and…
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The Importance of the Rating Business for Moody's 2024
Moody’s Corporation, a global integrated risk assessment firm, has consistently demonstrated the crucial role of its rating business in its financial performance. The company’s recent second-quarter 2024 earnings report underscores the significance of this segment, primarily driven by Moody’s Investors Service (MIS). Revenue Contribution In the second quarter of 2024, Moody’s reported a total…
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Moody’s Transformation: Expanding into New Frontiers with Project Guardian
Moody’s Corporation, traditionally known for its pivotal role in credit ratings and financial analysis, is undergoing a significant transformation. This shift is marked by its recent participation in Project Guardian, an initiative spearheaded by the Monetary Authority of Singapore (MAS) aimed at exploring asset tokenization and the potential of decentralized finance (DeFi). This move signifies…
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Implications of Moody’s Full Acquisition of GCR Ratings on the Credit Rating Industry and International Finance
In a significant move within the global credit rating industry, Moody’s Corporation has announced the full acquisition of Global Credit Rating Company Limited (GCR). This acquisition, following Moody’s 2022 majority stake purchase, represents a strategic deepening of Moody’s presence in Africa’s domestic credit markets. This development is poised to have substantial implications for the credit…
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Potential Impact of Proposed Tariffs on Chinese Car Imports on German Auto Manufacturers
In today’s edition of Moody’s “German Breakfast – July Edition,” Perrine Bajolle, Assistant Vice President – Analyst in Corporate Finance at Moody’s Ratings, provided an in-depth analysis of the anticipated repercussions of the proposed tariffs on Chinese car imports. The report underscores that these tariffs could severely impact German car manufacturers, with BMW being particularly vulnerable…
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