Rating Agency Developments

On May 27, Moody’s published a set of FAQs regarding the implementation of the amendment to Rule 17g-5 providing for certain disclosures with respect to all new structured finance credit ratings published by Moody’s. Moody’s Release. FAQs.

On May 24, Fitch updated its plan to address the implementation of the recent amendment to Rule 17g-5 providing for certain disclosures with respect to all new structured finance credit ratings published by Fitch. Fitch Release.

On May 26, Fitch published a special report that provides answers to FAQs from investors on South Korean credit card ABS. Fitch Release. Fitch Report.

On May 27, Moody’s published its methodology for rating UK securities exposed to residual value risk. Moody’s Release.

Note: Free registration is required for Fitch and Moody’s releases and reports.

FDIC and China Banking Regulatory Commission Announce Enhanced Cooperation

On May 26, the FDIC and the China Banking Regulatory Commission announced their agreement to enhance cooperation and coordination on cross border resolutions. Under the agreement, the two authorities will expand cooperation on contingency planning, coordination, and information sharing related to crisis management and the potential resolution of banks active in the two countries. FDIC Release.

Rating Agency Developments

On May 17, Fitch published a report entitled “Criteria for Rating U.S. Mortgage REITs and Similar Finance Companies” that addresses long-term Issuer Default Ratings (IDRs) for mortgage real estate investment trusts (REITs) and similar finance companies, as well as credit ratings for corporate debt obligations and preferred stock of these issuers. Fitch Release. Fitch Report.

On May 19, S&P requested comments on proposed changes to its methodology for evaluating insurers’ economic capital models through a refinement of its current enterprise risk management criteria. S&P Release. 

On May 18, S&P updated its rating assumptions for problem assets and credit costs of Russian banks. S&P Release.

On May 11, DBRS published methodology for stability ratings for structured income funds. DBRS Methodology. 

On May 6, Moody’s issued a request for comment regarding its approach to operational risk in global structured finance transactions. Comments on the report are requested by June 15. Moody’s Release.

Note: Free registration is required for Fitch, Moody’s and S&P releases and reports.

New York Fed Releases White Paper on Tri-Party Repurchase Agreement Reform

On May 17, the New York Fed released a white paper on the work of the Tri-Party Repurchase Agreement (Repo) Infrastructure Reform Task Force.  The white paper highlights policy concerns over weaknesses in the tri-party repo market infrastructure and seeks public comment on the task force’s recommendations to address these issues. New York Fed Release.

HAMP Performance Report

On May 17, Treasury and HUD released the April HAMP servicer performance report which shows a 13% increase in permanent modifications from the prior month and indicated that, by July, the reports will include more detailed performance measures, including a focus on the eight largest servicers, servicer compliance, program execution, and homeowner experience. Treasury Release. HAMP Report.