The Role of the Credit Rating Agencies

2018 ◽  
pp. 45-74
Author(s):  
Daniel Cash
Keyword(s):  
Credit Rating ◽  
Credit Rating Agencies ◽  
Rating Agencies

scholarly journals Information as a condition of justice in financial markets: The regulation of credit-rating agencies

2017 ◽  
Author(s):  
Boudewijn de Bruin
Keyword(s):  
Credit Risk ◽  
Financial Markets ◽  
Institutional Investors ◽  
Credit Rating ◽  
Credit Rating Agencies ◽  
Informational Needs ◽  
Sources Of Information ◽  
Rating Agencies ◽  
Mortgage Backed Securities

This chapter argues for deregulation of the credit-rating market. Credit-rating agencies are supposed to contribute to the informational needs of investors trading bonds. They provide ratings of debt issued by corporations and governments, as well as of structured debt instruments (e.g. mortgage-backed securities). As many academics, regulators, and commentators have pointed out, the ratings of structured instruments turned out to be highly inaccurate, and, as a result, they have argued for tighter regulation of the industry. This chapter shows, however, that the role of credit-rating agencies in achieving justice in finance is not as great as these commentators believe. It therefore argues instead for deregulation. Since the 1930s, lawgivers have unjustifiably elevated the rating agencies into official, legally binding sources of information concerning credit risk, thereby unjustifiably causing many institutional investors to outsource their epistemic responsibilities, that is, their responsibility to investigate credit risk themselves.

On the Role of the Credit Rating Agencies in the Euro Zone Crisis

2017 ◽  
pp. 177-203
Author(s):  
Periklis Boumparis ◽  
Costas Milas ◽  
Theodore Panagiotidis
Keyword(s):  
Credit Rating ◽  
Credit Rating Agencies ◽  
Rating Agencies ◽  
Euro Zone

scholarly journals A Study on the Role of Korean Credit Rating Agencies

2015 ◽  
Vol 40 (4) ◽  
pp. 123-144
Author(s):  
Doowon Ryu ◽  
Doojin Ryu ◽  
Heejin Yang ◽  
Kyttack Hong
Keyword(s):  
Credit Rating ◽  
Credit Rating Agencies ◽  
Rating Agencies

scholarly journals To Judge Leviathan: Sovereign Credit Ratings, National Law, and the World Economy

2005 ◽  
Vol 25 (2) ◽  
pp. 191-217 ◽  
Author(s):  
CHRISTOPHER M. BRUNER ◽  
RAWI ABDELAL
Keyword(s):  
World Economy ◽  
Credit Rating ◽  
The United States ◽  
Credit Rating Agencies ◽  
Rating Agencies ◽  
The Public ◽  
Global Capital ◽  
Sovereign Credit Ratings ◽  
The World

Recent decades have witnessed the remarkable rise of a kind of market authority almost as centralized as the state itself – two credit rating agencies, Moody's and Standard & Poor's. These agencies derive their influence from two sources. The first is the information content of their ratings. The second is both more profound and vastly more problematic: Ratings are incorporated into financial regulations in the United States and around the world. In this article we clarify the role of credit rating agencies in global capital markets, describe the host of problems that arise when their ratings are given the force of law, and outline the alternatives to the public policy dilemmas created when ratings receive a public imprimatur. We conclude that agencies designated for regulatory purposes should be required to provide more nuanced ratings exposing their perceptual and ideological underpinnings (especially for sovereigns), and facilitating consideration of alternatives to ratings-dependent regulation.

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