Have the procedures for the development of reports and recommendations by the rating agencies already been improved compared to the situation before the global financial crisis of 2008?
Are the reports and recommendations issued by the rating agencies more honestly developed, in accordance with the principles of business ethics, have the procedures for their development and the objective information policy been improved and still function as before the global financial crisis of 2008?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
i think one may also ask how '08 has impacted the relevance and credibility and power of Rating Agencies.
also, to what extent ratings have been made objective or more objective, to what extent ratings have been unpoliticized, and to what extent the subjective component in/ of ratings have been identified and isolated.
i think ratings are more objective and universal than rating agencies would want to admit.
therefore, the advances in alternatives to ratings by agencies.
Not corrected; but changed for their betterment... This paper studies the impact of the subprime crisis on the ratings issued by the rating agencies in evaluating the solvency of banks. After ascertaining a significant worsening of ratings after the crisis, the paper hypothesises the possibility that this worsening is due not exclusively to a deterioration in the banks’ credit quality, but also to a change in the behaviour of the rating agencies... Salvador, C., Pastor, J. M., & de Guevara, J. F. (2014). Impact of the subprime crisis on bank ratings: The effect of the hardening of rating policies and worsening of solvency. Journal of Financial Stability, 11, 13-31.
Accountability and agency interests matter... Gudzowski, M. (2010). Mortgage credit ratings and the financial crisis: The need for a state-run mortgage security credit rating agency. Colum. Bus. L. Rev., 245.
Rating agency accountability, accuracy amidst competition remains largely unanswered...Regulation and institution for overlooking is a necessity... Manns, J. (2013). Downgrading rating agency reform. Geo. Wash. L. Rev., 81, 749.
Is imposing liability on credit rating agencies a good idea???
Can investor-paid credit rating agencies improve the information quality of issuer-paid rating agencies???
Ellis, N. S., Fairchild, L. M., & D'Souza, F. (2011). Is imposing liability on credit rating agencies a good idea: Credit rating agency reform in the aftermath of the global financial crisis. Stan. JL Bus. & Fin., 17, 175.
Xia, H. (2014). Can investor-paid credit rating agencies improve the information quality of issuer-paid rating agencies?. Journal of Financial Economics, 111(2), 450-468.
Credit rating agencies have come under increased scrutiny since the financial crisis. Their failure to recognise the threats to the financial system prior to the crisis coupled with their steady downgrading of European sovereign debt has led to much criticism, especially from European politicians and economists.... This examines the major agencies' influence, independence and performance and explores whether a publicly funded European agency would improve the situation... Tichy, G., Lannoo, K., Ap Gwilym, O., Alsakka, R., Masciandaro, D., & Paudyn, B. (2011). Credit rating agencies: Part of the solution or part of the problem?. Intereconomics, 46(5), 232-262.
Dear Brian Barnard, D A Gayan Nayanajith, Thank you very much for participating in this discussion.
Thank you very much for the given bibliographic sources and participation in the discussion. Thank you for the information provided and the link to interesting data in the above-mentioned issues. Your perspective on this issue is interesting and very accurate.
Thank you very much and best regards, Have a nice day,
Dariusz Prokopowicz