Broken joints

Moody's Investors Service's determination to change its rating approach, and its subsequent decision to revise its controversial joint default analysis methodology, has left the agency's reputation in tatters.

Talk about ratings volatility: on February 22, Icelandic bank Glitnir had a senior debt rating of A1. A day later, it was catapulted six notches to Aaa. Moody's Investors Service has now signalled that Glitnir's rating is likely to end up somewhere between the two by April 10 - although no-one is yet sure where. None of this seesawing is occurring because of changes in the creditworthiness of the bank itself, so what's going on?

The answer is Moodys' new bank ratings approach, which makes