Download or read book Creditability of Credit Rating Agencies written by Abhisar Singh and published by . This book was released on 2013 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: Credit rating is an "opinion regarding the creditworthiness of an entity, a debt or financial obligation, debt security, preferred share or other financial instrument, or of an issuer of such a debt or financial obligation, debt security, preferred share or other financial instrument, issued using an established and defined ranking system of rating categories” and Credit rating agency is “a legal person whose occupation includes the issuing of credit ratings on a professional basis.”In this paper the author analyses the functioning of credit rating agencies in India, obligations upon a credit rating agency, creditability of credit rating agencies and in the end author concludes the article.
Download or read book Credit Rating Agencies written by Source Wikipedia and published by University-Press.org. This book was released on 2013-09 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. Pages: 32. Chapters: Standard & Poor's, Credit rating agency, TRW, Experian, Moody's, Dominion Bond Rating Service, Nationally Recognized Statistical Rating Organization, Equifax, Duff & Phelps, Fitch Group, ChexSystems, Fidelity National Information Services, MIB Group, Inc., DP Information Group, A. M. Best, Compagnie Francaise d'Assurance pour le Commerce Exterieur, PRBC, Dun & Bradstreet, Pacific Credit Rating, Dun & Bradstreet Credibility Corp, High Mark Credit Information Services, Dagong, Innovis, International Ratings Group, Compuscan, Mercantile agencies, Egan-Jones Rating Company, Big Three, Creditinform, Credit Rating Agency of Bangladesh Limited, International Suppliers Network, Equifax Canada, Japan Credit Rating Agency, Ltd., National Information & Credit Evaluation. Excerpt: A Credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued. The value of such security ratings has been widely questioned after the 2007-09 financial crisis. In 2003 the U.S. Securities and Exchange Commission submitted a report to Congress detailing plans to launch an investigation into the anti-competitive practices of credit rating agencies and issues including conflicts of interest. More recently, ratings downgrades during the...
Download or read book The role of credit rating agencies A blessing or a curse written by Muddassar Rasheed Malik and published by GRIN Verlag. This book was released on 2019-02-18 with total page 5 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2011 in the subject Economics - Finance, , course: Bank Financial Management, language: English, abstract: This report is examining the role of credit rating agencies and in further details arguments in its favor and against its favor are examined. In the beginning the role of credit rating agencies is defined and later methodological approaches to this topic are discussed, and afterwards, an analysis of pros and cons of credit rating agencies is conducted. To the end recommendations and suggestions to credit rating agencies for better performances are listed. Generally, credit rating agencies are playing vital role in markets and they united dispersed information comprehensively. Through this approach it is easier for investors or issuers to understand the real position of different concerns before taking any final decisions, beside this fact it is also in observation that credit rating agencies have some flaws which need to be addressed, like favoritism and unsolicited credit rating issuance. It is recommended to have transparency, scheduled active ratings and strict follow up with regulated authorities.
Download or read book The Independence of Credit Rating Agencies written by Gianluca Mattarocci and published by Academic Press. This book was released on 2013-10-22 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Independence of Credit Rating Agencies focuses on the institutional and regulatory dynamics of these agencies, asking whether their business models give them enough independence to make viable judgments without risking their own profitability. Few have closely examined the analytical methods of credit rating agencies, even though their decisions can move markets, open or close the doors to capital, and bring down governments. The 2008 financial crisis highlighted their importance and their shortcomings, especially when they misjudged the structured financial products that precipitated the collapse of Bear Stearns and other companies. This book examines the roles played by rating agencies during the financial crisis, illuminating the differences between U.S. and European rating markets, and also considers subjects such as the history of rating agencies and the roles played by smaller agencies to present a well-rounded portrait. Reports on one of the key causes of the 2008 financial crisis: agencies that failed to understand how to analyze financial products Describes inherent business model and pricing conflicts that compromise the independence of credit rating agencies Reveals how rating agencies large and small, regulatory bodies, and vested interests interact in setting fees and policies
Download or read book Credit Rating Agencies Still credible written by Ahmed Harfouf and published by GRIN Verlag. This book was released on 2017-07-20 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research Paper (undergraduate) from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 2:0, Kingston University London, language: English, abstract: The research is covering the three major credit rating agencies(S&P, Moody's and Fitch) and their involvement in the 2008 economic crisis The worldwide financial crisis has thrust credit rating agencies into the spotlight. The purpose of this study was to investigate the Credit Rating Agencies credibility after the crisis and the role they play in the global investment and financial markets. Another aim was to find out how the Credit Rating agencies were implicated in the crisis. Finally an explanation of the different aspects of rating process was given in the study. As an explanatory research, a case study analysis method was applied. This method was carried out by opting for a documentary analysis which relies highly on qualitative data. This research initiative currently under consideration can be seen as an effort to summarise the current reputation of Credit Rating Agencies and answer the question whether their credibility was affected or not. The results of the study discover that the credibility of Credit rating agencies was affected by the financial crisis, and this was due to its implication in this crisis by implying a non accurate methodology process for products assessment. The principal conclusion was that the credit rating agencies had a slight loss on their credibility after the financial crisis, but due to their previous role in sustaining the world financial markets and the need of market assessment by investors give another chance to restore this credibility.
Download or read book The Rating Agencies and Their Credit Ratings written by Herwig Langohr and published by John Wiley & Sons. This book was released on 2010-04-01 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt: Credit rating agencies play a critical role in capital markets, guiding the asset allocation of institutional investors as private capital moves freely around the world in search of the best trade-off between risk and return. However, they have also been strongly criticised for failing to spot the Asian crisis in the early 1990s, the Enron, WorldCom and Parmalat collapses in the early 2000s and finally for their ratings of subprime-related structured finance instruments and their role in the current financial crisis. This book is a guide to ratings, the ratings industry and the mechanics and economics of obtaining a rating. It sheds light on the role that the agencies play in the international financial markets. It avoids the sensationalist approach often associated with studies of rating scandals and the financial crisis, and instead provides an objective and critical analysis of the business of ratings. The book will be of practical use to any individual who has to deal with ratings and the ratings industry in their day-to-day job. Reviews "Rating agencies fulfil an important role in the capital markets, but given their power, they are frequently the object of criticism. Some of it is justified but most of it portrays a lack of understanding of their business. In their book The Rating Agencies and their Credit Ratings, Herwig and Patricia Langohr provide an excellent economic background to the role of rating agencies and also a thorough understanding of their business and the problems they face. I recommend this book to all those who have an interest in this somewhat arcane but extremely important area." -Robin Monro-Davies, Former CEO, Fitch Ratings. "At a time of unprecedented public and political scrutiny of the effectiveness and indeed the basic business model of the Credit Rating industry, and heightened concerns regarding the transparency and accountability of the leading agencies, this book provides a commendably comprehensive overview, and should provide invaluable assistance in the ongoing debate." -Rupert Atkinson, Managing Director, Head of Credit Advisory Group, Morgan Stanley and member of the SIFMA Rating Agency Task Force "The Langohrs have provided useful information in a field where one frequently finds only opinions or misconceptions. They supply a firm base from which to understand changes now underway. A well-read copy of this monograph should be close to the desk of every investor, issuer and financial regulator, legislator or commentator." -John Grout, Policy and Technical Director, The Association of Corporate Treasurers
Download or read book The Rating Agencies and Their Credit Ratings written by Herwig M. Langohr and published by John Wiley & Sons. This book was released on 2008 with total page 662 pages. Available in PDF, EPUB and Kindle. Book excerpt: This title is a guide to ratings, the ratings industry, and the mechanics and economics of obtaining a rating. It sheds light on the role that the agencies play in the international financial markets.
Download or read book Regulating Credit Rating Agencies written by Aline Darbellay, and published by Edward Elgar Publishing. This book was released on 2013-09-30 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: øŠAline Darbellay analyzes the obvious system relevance of credit rating agencies in depth and assesses the possible options for regulatory responses to this systemic issue. Thereby, the book is based on a fruitful comparative legal approach and formul
Download or read book Ratings Rating Agencies and the Global Financial System written by Richard M. Levich and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ratings, Rating Agencies and the Global Financial System brings together the research of economists at New York University and the University of Maryland, along with those from the private sector, government bodies, and other universities. The first section of the volume focuses on the historical origins of the credit rating business and its present day industrial organization structure. The second section presents several empirical studies crafted largely around individual firm-level or bank-level data. These studies examine (a) the relationship between ratings and the default and recovery experience of corporate borrowers, (b) the comparability of credit ratings made by domestic and foreign rating agencies, and (c) the usefulness of financial market indicators for rating banks, among other topics. In the third section, the record of sovereign credit ratings in predicting financial crises and the reaction of financial markets to changes in credit ratings is examined. The final section of the volume emphasizes policy issues now facing regulators and credit rating agencies.
Download or read book The Economics of Credit Rating Agencies written by Francesco Sangiorgi and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Economics of Credit Rating Agencies explores the economic and regulatory issues and frictions associated with credit rating agencies in the aftermath of the financial crisis. While ratings and other public signals are important, they can discourage independent due diligence and be a source of systemic risk. The authors highlight the diverse underlying views towards these competing approaches to reducing systemic risk and discuss the subtle contrasts between credit rating agencies and other types of due diligence providers, such as auditors, analysts and proxy-voting advisors. After an introduction, Section 2 provides a broad discussion of ratings in the regulatory framework, as well as how ratings potentially crowd out private information production and the risks associated with overreliance on ratings in market pricing. Section 3 contrasts credit rating agencies with alternative gatekeepers, such as auditors, analysts and proxy-voting advisers. Section 4 describes the difficulty of selling information and the underpinnings of the payment model for various financial information intermediaries under alternative assumptions. Section 5 discusses of rating agency analyst conflict of interest. An important aspect of credit ratings is the feedback effect that arises when a firm's behavior responds to the change in the cost of funding that is influenced by the rating. Feedback effects arise because of contractual triggers, but also through coordination and learning channels. Section 6 discusses these channels and especially the learning channel. Section 7 discusses selection issues including rating shopping and the contrast between solicited and unsolicited credit ratings. Section 8 contrasts ratings across products, including sovereign debt, and rating agencies. The nature of competition and the role of entry and reputation in the credit rating agency space are explored in Section 9. Section 10 examines why ratings matter, as well as techniques for identifying the real effects of ratings. The authors provide concluding observations and takeaways about rating agencies that emerged as a byproduct of the financial crisis in Section 11.
Download or read book Are Credit Rating Agencies Useful written by Sabrina Schleimer and published by GRIN Verlag. This book was released on 2018-08-22 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2018 in the subject Business economics - Investment and Finance, grade: 1,7, University of Strathclyde (Business School), course: International Financial Markets and Banking, language: English, abstract: This assignment will examine whether credit rating agencies can be regarded as useful. In order to do so, two given academic papers will be analysed and discussed, supplemented by further academic literature. The first of the two is a working paper by Efraim Benmelech called “Credit Ratings: Qualitative Versus Quantitative Information”. The second one is called “What’s Wrong with Credit Ratings” and written by Frank Partnoy. Before looking at these papers in greater detail, it is important to provide a general definition of CRAs. Gavras defines CRAs as “private companies [which] assess credit risk for companies and governments seeking to take out loans and issue fixed-income securities”. Arnold states that this risk assessment comes in the form of a rating, which represents the CRAs’ opinion of the rated entity’s creditworthiness, i.e. its “ability to repay its debt”. Both Gavras and Arnold remark that the rating ultimately affects the price and interest rate paid by the borrower on the debt instrument. Having generally defined CRAs, the authors of the two given papers also provide their own views. Both Benmelech and Partnoy agree with Gavras regarding the importance of CRAs in today’s credit markets and the strong influence these agencies have. They also agree that CRAs played a major part in the 2007/08 financial crisis. In his paper, Benmelech evaluates rating by S&P Global Ratings Inc. and concludes that they are vastly quantitative and, thus, can easily be predicted and substituted “by an algorithm that uses just ten financial variables”. On a similar note, Partnoy believes that rating methodologies are highly uninformative, that numerous reforms after the financial crisis have failed, and that the unchanged overreliance of investors and regulators on these ratings should be reduced.
Download or read book Credit Rating Governance written by Ahmed Naciri and published by Routledge. This book was released on 2015-01-30 with total page 253 pages. Available in PDF, EPUB and Kindle. Book excerpt: Credit rating agencies play an essential role in the modern financial system and are relied on by creditors and investors on the market. In the recent financial crisis, their power and reliability were often questioned, yet a simple rating downgrade could threaten to bankrupt a whole country. This book examines the governance of credit rating agencies, as expressed by their ability to fairly, ethically and consistently assign higher rates to issuers having lesser default risks. However, factors such as the drive for increased revenue and market share, the inadequate business model, the inadequate methodology of assessing risk, opacity and inadequate internal monitoring have all been identified as critical governance failures for credit agencies. This book explores these issues, and proposes some potential solutions and improvements. This will be of interest to researchers and advanced students of corporate finance, finance, financial economics, risk management, investment management, and banking.
Download or read book Are Credit Rating Agencies useful written by Moritz Meyer and published by GRIN Verlag. This book was released on 2018-05-24 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2018 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 69%, University of Strathclyde, language: English, abstract: Credit rating agencies are defined by Dittrich (2007) as companies which provide an opinion about the credit worthiness of a particular company, security or obligation by rating them on the basis of several parameters which are traditionally not publicly known. They also rate bonds issued by governments and municipal bonds specifying their ability to service their debts. On the contrary, according to Partnoy (2017) they usually provide an alphabetical letter score, which symbolises the forward-looking opinion of the credit rating agency on the credit worthiness of the rated obligor on a specific date. Therefore, the credit rating agencies are able to reduce information asymmetry by providing useful information to participants in debt markets and potential investors, which makes the credit rating agencies highly important as claimed by Utzig (2010). This transparency of information would otherwise not be available. On the other hand, Benmelech (2017) describes credit rating agencies as reputational intermediaries that bridge the information gap between issuers and investors by their ability to produce and accumulate credible information about debt issues. The score awarded by rating agencies enables the investor to decide whether or not to invest their money. The credit rating agency market is, as pointed out by Benmelech (2017), dominated by three big players as an oligopoly. Research by Partnoy (2017) and ESMA (2016) discovered that Moody's Investors Service Plc. and S&P Global Ratings Inc. (S&P) control the market with around 80 percent market share followed by Fitch Ratings Inc. which controls a further 15 percent.
Download or read book Credit Rating Agencies and Their Potential Impact on Developing Countries written by Marwan Elkhoury and published by . This book was released on 2008 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Credibility of Credit Ratings written by Arjan Schipperus and published by LAP Lambert Academic Publishing. This book was released on 2012-03 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: This work examines the possible relation between credit risk and credit ratings, and the timeliness of this relation for the financial services. Investors and regulators use credit ratings as part of their decision making process and it is important to understand to which extend credit ratings reflect actual credit risk. This research focuses on the financial services because of the increasing credit risk over the years 2003 till 2007 and the strong commercial interests of credit rating agencies in this industry. A distorted relation between credit risk and credit ratings is most likely to become apparent in the financial services. Six financial metrics are used as a proxy for credit risk and two variables are used to measure changes in credit ratings. Based on the data and analyses the relation between credit ratings and credit risk is - at best - weak for the research period. The most significant relations are lagged by three or four years, which means that credit ratings are responding three or four years after changes in credit risk occur.
Download or read book The Governance of Credit Rating Agencies written by Andrea Miglionico and published by Edward Elgar Publishing. This book was released on 2019 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global crisis revealed that credit rating agencies (CRAs) are capable of bringing about potential distortions in the financial sector, thereby resulting in a reduction in market confidence which, in turn, influences negotiations and expectations. CRAs need to be held accountable for lack of transparency and inaccurate ratings, however the existing regulatory framework does not secure adequate investor protection. This book provides a new and important contribution to research in the area, at a crucial time in the debate around financial regulation and investment regimes.
Download or read book Credit Rating Agencies on the Watch List written by Raquel García Alcubilla and published by Oxford University Press. This book was released on 2012-03-29 with total page 311 pages. Available in PDF, EPUB and Kindle. Book excerpt: Rating agencies judge how solvent banks and big companies are. Prior to the financial crisis they were too optimistic when rating the risk of the banks and this prompted politicians worldwide to issue new regulations. This book explains what rating agencies do, why they are so important for the economy, and the new European Regulation.
