Making the grade

The stone in the shoe of the global bond market these days is when and if General Motors Corp. and Ford Motor Co. will lose investment-grade ratings at Moody's Investors Service and Standard & Poor's. The fate of about $375bn worth of debt hangs in the balance. Rating companies have the power of life and death over the borrowers whose debt-paying abilities they assess. Their importance is growing as regulators enshrine credit ratings in accounting and investment rules, and as the global capital markets depose banks as the primary source of lending. In The New Masters of Capital: America...