In the summer of 2002, John Diaz, a managing director at Moody’s Investors Service, was called before a US Senate subcommittee investigating the collapse of Enron. The senators wanted to understand why Moody’s had said that the energy trader’s debt was investment-grade in late October of that year – only to see the company default on its bonds four weeks later as it declared bankruptcy.

Diaz described his company as an information provider. Moody’s researched and analysed companies’ financial health, then offered investors its views, to help them decide where to put their money. “Ratings,” he told the subcommittee, “are a simple symbol system to express relative creditworthiness ... Moody’s ratings are designed to provide a relative measure of risk, with the likelihood of default increasing with lower ratings.”