Friday, July 04, 2008

Moody's bug rumbles on


The Financial Times has reported more about fallout from the Moody’s credit rating bug in the last couple of days: Moody's to investigate staff over rating bug (page 1) and Moody's to check on accuracy.

I blogged about this a few weeks ago and had a very interesting comment pointing out that despite the bug Standard & Poor’s gave the same instruments a similar rating, that is worrying.

According to the FT:
"We have no reason to believe that our record [with computer bugs] is unusual," Mr Cantor [of Moddy’s] said, noting that bugs often appear in software development throughout the computing world.

Indeed, that a bug existed is not unusual, that it took over a year to fix is not unusual. That is may have lost companies lots and lots of money probably isn’t even unusual.

I don’t know what’s worse, that fact that this situation is regard as “usual” in the industry or that Moody’s are using everyone else’s failings to excuse their own.

We - well some of us at least - know the solutions, we can fix this, but if Moody’s and the rest of the industry accept this as “normal” what’s the point?