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...

This paper analyses the role of credit rating agencies in sovereign debt crises. Using a panel of 53 emerging and developing countries with annual data going back to 1977, the paper shows that credit ratings are not very good predictors of debt distress events once tested against a simple...

This paper takes a look at two areas where the subprime crisis has triggered debate and is paving the way for possible movement towards greater global regulation: international banking supervision and the role of credit rating agencies. It surveys the varied range of opinions on the role that...

This paper, a chapter in the forthcoming Research Handbook on the Economics of Corporate law, describes the leading research related to credit ratings, and assesses regulatory proposals related to ratings, including those in the Dodd-Frank Act of 2010. It explains how rating agencies have...

We show that rating agencies have become more conservative in assigning credit ratings to corporations over the period 1985 to 2009. Holding firm characteristics constant, average ratings have dropped by three notches (e.g., from A to BBB ) over time. Consistent with the view that this change...

Credit rating agencies (CRAs) play a central role in the debt (bond) markets of many countries. CRAs have also attracted a considerable amount of public and policy attention during the past decade, especially with respect to their role in the financial crisis of 2008–2009 and their role in the...

Cet article analyse les agences de notation financière comme des institutions de production de normes globales. En s'appuyant sur l'approche du droit global préconisée par l'Ecole de Bruxelles, l'auteur prétend que la désintermédiation financière a transformé les agences de notation...

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...

Credit ratings are a quasi-public good, and investors and financial markets regulators need an independent assessment of the credit-worthiness of an issuing entity because of information asymmetries and principal agent problems. In light of the high volatility of market-based measures and the...