What is Moody's?

Moody's Investors Service is a credit rating agency that performs international financial research and analysis of commercial and government entities.

This company was founded in 1909 by John Moody, a financial analyst and U.S. investor, pioneering the bond rating. Moody's rates the creditworthiness of borrowers using a standardized grading scale. His main rival is Standard & Poor's .

but how does it work? Moody's collects enough data to make a rating , which represents the agency's opinion on an issuer's ability to meet payments under any financial instrument, as a bonus.

Why is it so important to their grades and scores? The reality is that markets are quite appropriate to the notes of the three major agencies, even though their mistakes in recent years. It is assumed that Moody's has excellent technicians, who know the countries or companies to which they qualify, but not only important for the credibility they can generate, but also require some institutions to invest only in assets that exceed a certain note. This means that if you have a good grade will not invest in you.

The consequences of all this so easy to imagine, can anyone want to buy debt of your country because of these agencies, which incidentally only three, have lowered your score, or they think you do not have liquidity. And this is a 'domino effect' in the following investor fear, do not buy ... you know how it ends.