Rumbles in the ratings jungle

Things are astir in the ratings jungle. Moody's published a paper earlier this year detailing a specific approach to assessing operational risk. Fitch will shortly be devoting a separate section of its rating reports to op risk. And Standard & Poor's, whilst acknowledging that assessment of op risk remains essentially a qualitative analysis, is developing further metrics by which to assess it in financial companies.

Add to that the acquisition by Fitch Risk Management - an affiliated firm of ratings agency Fitch - of OpVantage and the First database over the past 12 months, and it's obvious that wagons are rolling. But in what direction? Is this all part of a move to have op risk ratings alongside credit ratings? Is there a market for an op risk rating? And if there is, what form should it take?

But first we need to think about the added value an op risk rating might provide. After all, it is a given