Moody's - Explained
What is Moody's?
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Table of ContentsWhat is Moody's?How Does Moody's Work?The Analytics of Moody's Understanding Moody's Analytics Real-World Examples of Solutions Moodys Analytics ProvidesInvestment Advice
What is Moody's?
Moodys is an American credit rating business company that provides practices, solutions, and tools for managing and measuring financial risks. John Moody is the founder of Moodys, and his main aim for starting the corporation in 1909 was to provide statistics of stocks and bond ratings in the market. In 1975, the company received the identity of the National Statistics Rating Organization (NRSRO) from the US Securities and Exchange Commission. It is one of the top three credit rating agencies in the world, along with Fitch Group and Standard & Poors (S&Ps).
How Does Moody's Work?
Moodys offers intensive financial research on stocks and bonds that commercial banks and governments issue worldwide. The company decides if the borrower of funds is worth the credit by using international and standardized rating scales. The scales measure investor loss in case the borrower defaults payment of the credit. The company also charges debt securities in different market sections including; government and corporate bonds, banks and credit institutions, and money market funds. The charges go from AAA, being the most expensive grade to C, which is the lowest rating normally given to default securities. Since the 2000s, Moody's has frequently been making its analysis reports available to the journalists. The company has also been planning for public conferences to educate new investors on the issuance of securities and how to analyze debt securities. Moodys Corporation has subsidiary companies including; Moodys Analytics (MA) which provides software for financial analysis, and Moodys Investors Service (MIS) which offers credit ratings on debt securities.
The Analytics of Moody's
Moodys Analytics is a branch of Moodys corporation that deals with software solutions for managing risks in a business. The company provides its clients with financial intelligence on how to navigate in a growing marketplace. The top-tier analytics group covers a wide range of issues including; world events, credit rankings, and risk factors all over the world. Moodys Analytics team has been operational for a long time, and they keep expanding their knowledge to provide better solutions and advice to investors.
Understanding Moody's Analytics
Moodys Analytics begun as a profitable supplier of content, ratings, and research from Moodys. Even though it still provides all these services, Moodys Analytics now includes more solutions for financial risks. Since 2008, it has been an independent unit from Moodys Investors Service providing global innovation solutions and business strategies. Moodys Analytics offers organizations and investors worldwide with an understanding of modern-day business complexities and how to take advantage of market developments. Other clients include; risk and compliance professionals, capital market participants, and finance and accounting professionals. They get to make wise investment decisions and generate successful business strategies.
Real-World Examples of Solutions Moodys Analytics Provides
- Credit origination: provides all-round solutions that assist creditors to makes more profits from their loans
- Asset and liability management: Moodys Analytics incorporates funds transfer pricing, risk management, and asset management in a wide enterprise platform.
- Data management provides data management tools and datasets that are comprehensive to clients and investors.
- Investments and Pensions: offers models for asset-liability scenarios, designs for investments, and various solutions to manage risks in a business
- Economics: offers better economic data forecasts and analysis than the other credit solution companies
- Regulatory and Accounting: reports global accounting frameworks and regulations that they use to measure impacts of capital in the market
- Portfolio Management: provides the clients with models, research, data, and credit risk tools that they can include in the businesses
- Learning Solutions & Certifications: offers courses and certifications to the clients to give them a better understanding of financial risk management and other proficiencies in business.
- Structured Finance provides an understanding of the marketplace through research and analyzing the data.
Many credit institutions, private businesses, and investors rely on Moodys knowledge to make them better understand different marketplaces and the directions each is taking. Moodys operations are similar to the other analytic solutions companies. Therefore, clients should use it as an analysis tool rather than as a factor that decides where they should invest their money.