| Type | Subsidiary |
|---|---|
| Industry | Financial services |
| Founded | 2007 |
| Services | Credit analysis, Financial risk management |
| Employees | 1,400 |
| Parent | Moody's Corporation |
| Website | www.moodysanalytics.com |
| References: [1] | |
Moody's Analytics is a subsidiary of Moody's Corporation established in 2007 to focus on non-rating activities, separate from Moody's Investors Service. It performs economic research related to credit analysis, performance management, financial modeling, structured analysis and financial risk management. Moody's Analytics also offers software and consulting services, including proprietary economic models and software tools, as well as professional training for the financial services sector, particularly risk management accreditation. The company also provides quantitative analysis and credit risk management tools.
Moody's Analytics is composed of a number of different divisions including Moody's KMV, Moody's Economy.com, Moody's Wall Street Analytics, the Institute of Risk Standards and Qualifications, and Canadian Securities Institute Global Education Inc.
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In 1995, Moody's Corporation started a business unit providing quantitative analysis services, including credit risk assessment software and services, called Moody's Risk Management Service (MRMS).[2][3] In the late 1990s, Moody's began pursuing partnerships and acquisitions to expand MRMS's client base and capabilities.[3] In early 2000 Moody's acquired the Software Products Group of Crowe, Chizek & Co., then the eighth largest accounting and consulting firm in the U.S.,[4][5] which brought software used by banks to analyze the risk in taking on commercial loans.[6] The same year, MRMS partnered with RiskMetrics to develop software that combined credit risk analysis with portfolio management.[3]
In February 2002, Moody's purchased KMV (Kealhofer, McQuown and Vasicek), a San Francisco-based quantitative risk management firm, and merged it with MRMS to create Moody's KMV.[7][8] The company acquired KMV's clients and its software tool for calculating the probability of credit default, EDF (Expected Default Frequency).[9] Moody's KMV integrated financial modeling software from each former company and, in 2003, debuted its credit risk management system, Credit Monitor.[10]
In 2005, Moody's acquired Economy.com, an economics research and analytics firm based in West Chester, Pennsylvania, adding services related to economic and demographic research, country analysis, and data on industrial, financial and regional markets.[11] The following year, the firm acquired Wall Street Analytics, a San Francisco-based financial analysis and monitoring software developer,[12] which then became Moody's Wall Street Analytics.[13] The acquisition brought with it software for financial risk management, including a tool for collateralized debt obligation (CDO) valuation.[13][14]
In August 2007, Moody's Corporation created a new division for its combined non-ratings businesses, Moody's Analytics, to operate separately from Moody's Investors Service.[15] Subsidiary companies that make up Moody's Analytics today include Moody's KMV, Economy.com, Wall Street Analytics, Fermat International, Enb Consulting Ltd., The Institute of Risk Standards and Qualifications (iRSQ) and, most recently, CSI Global Education Inc. The division began operations with Moody's KMV, Economy.com and Wall Street Analytics, and other subsidiary companies were added to Moody's Analytics through later acquisitions.
Moody's Analytics' flagship products include Market Implied Ratings (MIR) and Expected Default Frequency (EDF) software packages. MIR applies Moody's ratings scale to credit and equity market price signals so users can identify investment opportunities; EDF estimates a company's credit default probability based on quantitative factors including market capitalization, equity, volatility and capital structure.[16] The division also provides financial institutions with analytical and risk management software, including its RiskAnalyst credit risk management software, which is used to provide analysis of credit data for commercial loans and to calculate risk.[17]
In 2008, Moody's Analytics acquired Fermat International,[18] a Brussels-based provider of software for financial risk and performance management in the banking sector,[19][20][21] used by over 100 banks across 30 countries in Europe, the Middle East and Asia.[19][21] In December 2008, Moody's Analytics added Enb Consulting Ltd., a provider of professional training and career services in the financial sector based in Surrey, England, to Moody's Analytics Training Services.[22] Its services include technical and soft skills training programs for banking and capital markets professionals.[23]
In 2010, Moody's Analytics established the Institute of Risk Standards and Qualifications (iRSQ), a training body providing competency accreditation in financial risk management.[24] The iRSQ's qualifications have been recognized by the UK Office of Qualifications and Examinations Regulation (Ofqual) and its certification program is endorsed by the Financial Services Skills Council as the standard for training in applied risk management.[25] Moody's Analytics further added to its training services in November 2010, when it acquired Canadian Securities Institute Global Education Inc. (CSI), a provider of training and certification for the financial sector, best known for its introductory course to stocks and bonds, the Canadian Securities Course, which is mandatory for Canadian licensed investment advisers.[24][26]
In June 2010, Moody's Analytics formed a strategic alliance with Experian to provide software for financial institutions to manage consumer loan portfolios. The first product provided by the companies was Moody's CreditCycle Plus, a tool to forecast potential losses and provide stress testing of loan portfolios.[27] In March 2011 Moody's Analytics announced the release of a software program developed by Moody's Research Labs, the Mortgage Portfolio Analyzer, to assist portfolio managers in managing credit risk.[28]