Rating The Rating Agencies
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The Rating Agencies And Their Credit Ratings
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Author : Herwig Langohr
language : en
Publisher: John Wiley & Sons
Release Date : 2010-04-01
The Rating Agencies And Their Credit Ratings written by Herwig Langohr and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-04-01 with Business & Economics categories.
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
The Rating Agencies And Their Credit Ratings
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Author : Herwig M. Langohr
language : en
Publisher: John Wiley & Sons
Release Date : 2008
The Rating Agencies And Their Credit Ratings written by Herwig M. Langohr and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Business & Economics categories.
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.
Ratings Rating Agencies And The Global Financial System
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Author : Richard M. Levich
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Ratings Rating Agencies And The Global Financial System written by Richard M. Levich and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.
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.
Are Rating Agencies Powerful An Investigation Into The Impact And Accuracy Of Sovereign Ratings
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Author : Mr.John Kiff
language : en
Publisher: International Monetary Fund
Release Date : 2012-01-01
Are Rating Agencies Powerful An Investigation Into The Impact And Accuracy Of Sovereign Ratings written by Mr.John Kiff and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-01-01 with Business & Economics categories.
We find that Credit Rating Agencies (CRA)'s opinions have an impact in the cost of funding of sovereign issuers and consequently ratings are a concern for financial stability. While ratings produced by the major CRAs perform reasonably well when it comes to rank ordering default risk among sovereigns, there is evidence of rating stability failure during the recent global financial crisis. These failures suggest that ratings should incorporate the obligor's resilience to stress scenarios. The empirical evidence also supports: (i) reform initiatives to reduce the impact of CRAs' certification services; (ii) more stringent validation requirements for ratings if they are to be used in capital regulations; and (iii) more transparency with regard to the quantitative parameters used in the rating process.
Regulating Credit Rating Agencies
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Author : Aline Darbellay,
language : en
Publisher: Edward Elgar Publishing
Release Date : 2013-09-30
Regulating Credit Rating Agencies written by Aline Darbellay, and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-09-30 with Business & Economics categories.
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
The Role Of Credit Rating Agencies A Blessing Or A Curse
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Author : Muddassar Rasheed Malik
language : en
Publisher: GRIN Verlag
Release Date : 2019-02-18
The Role Of Credit Rating Agencies A Blessing Or A Curse written by Muddassar Rasheed Malik and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-02-18 with Business & Economics categories.
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.
Rating Agencies And Their Role During The Financial Crisis
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Author : Constantin Jäkel
language : en
Publisher: GRIN Verlag
Release Date : 2011-07
Rating Agencies And Their Role During The Financial Crisis written by Constantin Jäkel and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-07 with Business & Economics categories.
Seminar paper from the year 2011 in the subject Economics - Finance, grade: 1.3, Berlin School of Economics and Law, language: English, abstract: After the Asian crisis during the 1990s and the startling insolvencies of Enron and Parmalat, the recent financial crisis is one the most important trigger to raise doubt concerning the proper work of rating agencies. They are criticized because of their various conflicts of interest and obvious deficits in practicing their rating methods. The rating agencies should be jointly responsible for the emergence of the so-called bubble markets during the last couple of years. Because of these bubbles and their boom and burst effect, private as well as institutional investors lost enormous sums of assets and single countries were thrown into financial turmoil. Because of these facts, the discontent concerning the rating agencies grew. People took additional notice of their market power, which they only obtained because of their influence on the global capital flows and the use of ratings to regulate the financial markets. To particularize the issues, it is helpful to bring up the year 2007, when the delayed payments among the subprime loans became more frequent. This was due to the slower increase of the housing prices and the rising short-termed interest. Consequently, the rating agencies depreciated a lot of these structured financial products, many of which had received the highest seal of quality before (AAA). Those actions both led to a massive loss of confidence on the investors' side and a remarkable decline of liquidity. The former market of securitization products no longer existed. Influenced by this development and because they were considerable involved in this securitization business, a lot of banks also got into this downstream. In the first part of this term paper I will present some general facts about the rating agencies including their history of origins. Afterwards I will mention the process of rating and th
Ratings Rating Agencies And The Global Financial System
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Author : Richard M Levich
language : en
Publisher:
Release Date : 2002-08-31
Ratings Rating Agencies And The Global Financial System written by Richard M Levich and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-08-31 with categories.
Are Credit Rating Agencies Useful
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Author : Moritz Meyer
language : en
Publisher: GRIN Verlag
Release Date : 2018-05-24
Are Credit Rating Agencies Useful written by Moritz Meyer and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-24 with Business & Economics categories.
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.
The Economics Of Credit Rating Agencies
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Author : Francesco Sangiorgi
language : en
Publisher:
Release Date : 2017
The Economics Of Credit Rating Agencies written by Francesco Sangiorgi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Business & Economics categories.
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.