Some time back, I was reading something about someone in the US suggesting different types of ratings (e.g. Aaa1, Baa1) for different asset classes. To me, that's B.S.
Reason is very simple. It boils down to the reason for the rating. It is suppose to make it easier for people to gauge the safety ratings of the different products. That is the value-added proposition of such a rating by a rating agency. What's the use of the rating if it is rated only among its own asset class? Do we care if the junk bond is Aaa1 or Caa1? To me, it's still a junk bond, and it's a risky investment. I do not care how is it rated, because the product by nature is risky.
Comparison of ratings within its own asset class is nothing special. If the role of a rating agency is not to analyse the different types of asset classes and produce a single rating standard across all the products, then I think that there is no need even for a rating.
It just defeats the whole purpose.
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