WSJ.com writes "Moody's Gets Mixed Grades on Money-Fund Plan". It says, "Investment ratings agency Moody's Corp. plans to replace its AAA ratings for money-market mutual funds with a more-detailed grading system, but some in the fund industry give the idea low marks. Officials at several leading funds sponsors expressed some discomfort with proposals to create a new ratings scale ranging from MF1 to MF4, in part because it goes against industry practice and changes what investors are used to -- they say that many investment mandates, for example, require that an investment has to be rated AAA. But Moody's said the change is intended to highlight the risks of money-market funds more clearly. Under the new system, Moody's would give greater importance to factors such as the capacity of the fund to meet unexpected redemptions and the ability and willingness of the parent company to bail out a fund should that become necessary." The article quotes Peter Crane, "These proposals are going down [among fund companies] like a lead zeppelin. Tweaking the ratings criteria is one thing, but moving away from AAA-ratings is sacrilege.... It will take years or decades to condition people to this new system."
