When things go wrong, it is always good to find someone to blame. As the credit crisis started to unfold in 2007, credit rating agencies (“CRAs”) emerged as the villain – or scapegoat, one might say – for commentators and regulators alike. To sum up, observers accused CRAs of doing a...

The recent Global Financial Crisis has focused our attention on the integrity of rating agencies. Often condemned for being too slow to act, rating agencies have been blamed during many financial crises. This impression opens some research questions addressed in this paper. What are the...

Major U.S. credit rating agencies are criticized for failing to understand developments in other economies and thereby impeding capital access by assigning lower ratings. Consistent with this, we find that Moody's and S\&P credit ratings are more favorable after the agencies establish a local...

The objective of Credit Rating Agencies (CRAs) is to reduce the degree of asymmetric information in capital markets by issuing judgments. These judgments, also known as ratings, provide investors with the likeliness of default of debt issuers and represent valuable input for the global financial...