It must not be easy being a rating agency. Where corporate debt is concerned, the major credit rating agencies (“CRAs”) are said to be too slow and lagging the market. When the topic is structured finance, the agencies are said to inflate ratings to attract business. And when the subject is...

The principal agent problem is one of the major issues of the credit rating agency market. Is it possible to solve the prevailing incentive problem of the market and contemporaneously satisfy the reputation demand of the investors? This paper presents an option for regulating the credit rating...

In the wake of the global financial crisis, the European Parliament and Council Regulation 1060/2009 on Credit Rating Agencies has recently been published in the Official Journal of the European Union. With this Regulation the European Union takes a first step in addressing calls for a better...

In the wake of the ongoing global financial crisis, recently the European Commission has published a proposal for a European Parliament and Council Regulation on Credit Rating Agencies. With this proposal the European Union aims at addressing calls for more regulation of the (global) financial...

In the United States and Europe faulty credit ratings and flawed rating processes are widely perceived as being among the key contributors to the global financial crisis. That has brought them under intense scrutiny and led to proposals for radical reforms. The ongoing debate, while centered in...

After analyzing the long-term credit ratings on European structured debt products before and after European Parliament's introduction of Article 8d in June 2013, which aims to diversify the market by encouraging the use of small credit rating agencies, I find that the rating split between large...

I examine the effects of contemporaneous credit rating and watchlist announcements on the over-the-counter U.S. corporate bond market. I find significant negative daily abnormal returns (-2.91%) over a ten-day window associated with a downgrade announcement with negative watch. The effect is...

The paper focuses on two functions of shadow banking: securitization and collateral intermediation. It describes operations of the shadow banking system, demand factors, systemic risks, and associated policy priorities