An analysis of the credit rating agencies Online publication date: Sat, 30-Aug-2014
by Stephen D'Amato
International Journal of Critical Accounting (IJCA), Vol. 6, No. 3, 2014
Abstract: Credit rating agencies play a critical role in financial markets; by rating the creditworthiness of a wide range of borrowers - from corporations to sovereigns - these agencies add liquidity to markets that would otherwise be illiquid, promote efficiency within such markets, and perhaps most importantly of all, reduce the risk of asymmetric information for investors. Standard & Poor's, Moody's and Fitch dominate the ratings industry, accounting for nearly 95% of the global market. However, in the wake of the 2008 financial crisis, these Big Three credit rating agencies have faced mounting criticism stemming from the role they played in perpetrating the crisis. The purpose of this paper is twofold: one - to analyse the role these agencies played in the 2008 financial crisis and summarise the regulations in place; and two - to evaluate their sovereign rating methodology and assess the ratings of these agencies in regards to Greece, France, and the USA.
Online publication date: Sat, 30-Aug-2014
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Critical Accounting (IJCA):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org