Governance practices clearly have a big impact on credit ratings and outlooks, according to Moody's Investors Service.
Experts may still be debating whether good corporate governance results in higher stock prices. At least for banks, however, governance practices clearly have a big impact on credit ratings and outlooks, according a review of 27 major U.S. financial institutions by Moody's Investors Service.
That impact has been felt principally after the disclosure of control failures, either leading to downward movements or creating constraints on future uplifts, according to Moody's senior vice president Mark Watson, an author of the report. The most recent examples: Citigroup, Doral, Fifth Third, Riggs, and SunTrust.
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