Moody’s Investors Service has released a special report today, detailing the changes it will make in an attempt to improve the flow of timely credit opinion to financial markets.

The developments include more comprehensive analysis of rating triggers, enhanced research on the liquidity risk of investment-grade and speculative-grade issuers, more extensive use of market information, and consideration of other enhancements to the rating process. It says, “any increase in the frequency or extent of recent rating adjustments is a result of changes in Moody’s opinions in the context of a more volatile credit environment, rather than a shift in our fundamental approach to the rating process.”

In the interest of providing more timely opinions, Moody’s says that it will consider changes to the process by which rating changes are conducted. Rating changes have historically been managed through the use of a rating review process. This review process typically includes one or more meetings with rated issuers to allow them to respond to the concerns or opportunities underlying the review.

It is now considering a number of measures that could create greater alignment in the pace of rating changes with the pace of credit changes. These measures, which may increase the volatility of ratings, could include: shortening ratings reviews by compressing the review period where necessary to keep pace with changes in credit quality; permitting more responsive actions in reaction to material news; tolerating an increased incidence of rating changes without formal rating reviews; and, streamlining the process for establishing rating outlooks or, potentially, eliminating rating outlooks altogether.

“At this stage, we have formed no conclusions as to the appropriate course of action. The market should be assured that our objective is continued improvement in the information content of our bond ratings. To this end, we will not make material changes to our rating process that do not contribute to this objective, nor will we move forward with any proposal without extensive market dialogue. Our next step will be to solicit comments on these proposals. We expect to begin this process in the coming weeks, and we look forward to market feedback on these ideas.”