Quality control
Moody’s downgrade of Enterprise Inns has exposed a flaw at the heart of the rating process. Karl Bergqwist argues that the methodology used by the agencies can giverise to contradictions when applied to modern-day structured instruments
I like sponge cake and I like caviar. However, when my eight-year-old niece put some smoked cod roe on top of a slice of sponge cake, it was a less than memorable gastronomic experience. I also like ratings (admittedly less than sponge cake), and I really like debentures (though not as much as caviar). However, when UK pub owner Enterprise Inns and rating agency Moody’s put the two together, it made for a less than palatable investment experience. Some things – no matter how good they are – just
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