Proposed Changes to Methodology
On 9 September 2014, we proposed revisions to our Bank Rating Methodology via a Request for Comment. The revised methodology was published on 16 March 2015, you can find more information at www.moodys.com/ratingbanks
Baseline Credit Assessment
The approach to determining the Baseline Credit Assessment, the standalone rating of a bank, is changing. Our proposal includes placing greater weight on system-wide pressures via the addition of a "macro profile" and providing greater clarity on how our qualitative analysis impacts the scorecard output.
MACRO PROFILE
Assesses the bank’s operating environment.

FINANCIAL PROFILE
Captures the bank’s financial health by gauging key solvency and liquidity ratios.

QUALITATIVE FACTORS
Adjusts the financial profile to reflect non-financial qualitative factors.

BCA
A measure of default probability excluding external support.
Support & Structural Analysis
Our Support & Structural Analysis assesses not only the probability of extending support, but also incorporates a
new liquidity-side analysis considering the impact of a
failure on different creditor classes.
AFFILIATE SUPPORT
Adjusts the BCA to incorporate support from affiliated entities.

ADJUSTED BCA
A measure of the probability that a bank will require support to avoid default beyond the support provided by its affiliates.

LOSS GIVEN FAILURE
A liability-side analysis that assesses the impact of a failure – in terms of the potential loss on rated debt and deposits.

GOVERNMENT SUPPORT
Our judgment about the probability of a government to provide support.

CREDIT RATINGS
Request for Comment

The Request for Comment offers full insight into the details of each analytical component.



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