By Sam Jones, Gillian Tett and Paul J Davies in London
Published: May 20 2008 23:36 | Last updated: May 21 2008 16:04
Moody’s awarded incorrect triple-A ratings to billions of dollars worth of a type of complex debt product due to a bug in its computer models, a Financial Times investigation has discovered.
Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower.
Made me wonder what kind of testing should have caught this bug. Clearly, automated regression testing should have caught this, but only if the original manual test plan included a test for this. Really – this is a test planning issue, more than a test execution issue. You won’t find the bugs you don’t look for.
Worse – you won’t find bugs your not educated enough to find. If you don’t have business analysts, or subject matter experts designing your tests, you’ll never find this kind of critical bug. But hey – what’s the big deal – we’re only talking about mis-rating a couple billion dollars of debts…no biggee.