Bill Harrington was an analyst in the structured finance group at Moody’s for 11 years.
He left the ratings agency mid-way through 2010, and despite the financial implosion of 2008 — and Moody’s role in it — he says some of the most worrying parts of the company’s culture remain, ProPublica reports.
After Moody’s and other similar agencies gave out AAA ratings to financial clients that were clearly not worthy of that rating in the lead up to the crisis, since then, investors have been spooked.
And with good reason – the agency lets its analysts get bullied by the bankers who pay their bills.
According to ProPublica,
Moody’s has recognised it has a disaster on its hands — a public relations disaster. Clients — the investors who use ratings — have been losing faith in the agencies. Mr. Harrington said that Moody’s executives marched analysts into meetings to explain how they were going to tell their clients about how much Moody’s had grown and learned from its mistakes.
And Harrington claims the meetings aren’t you’re average pep-talk-type workshops.
He told ProPublica,
It was as if they were in “Communist re-education camp.”
Harrington says that at one such meeting, an analyst suggested that they be given training in “how to deal with banker abuse.” The executive who was running the workshop “immediately shot down” the proposal.