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The Independence Of Credit Rating Agencies

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The Independence of Credit Rating Agencies

The Independence of Credit Rating Agencies Book
Author : Gianluca Mattarocci
Publisher : Academic Press
Release : 2013-10-22
ISBN : 012404736X
Language : En, Es, Fr & De

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Book Description :

The Independence of Credit Rating Agencies focuses on the institutional and regulatory dynamics of these agencies, asking whether their business models give them enough independence to make viable judgments without risking their own profitability. Few have closely examined the analytical methods of credit rating agencies, even though their decisions can move markets, open or close the doors to capital, and bring down governments. The 2008 financial crisis highlighted their importance and their shortcomings, especially when they misjudged the structured financial products that precipitated the collapse of Bear Stearns and other companies. This book examines the roles played by rating agencies during the financial crisis, illuminating the differences between U.S. and European rating markets, and also considers subjects such as the history of rating agencies and the roles played by smaller agencies to present a well-rounded portrait. Reports on one of the key causes of the 2008 financial crisis: agencies that failed to understand how to analyze financial products Describes inherent business model and pricing conflicts that compromise the independence of credit rating agencies Reveals how rating agencies large and small, regulatory bodies, and vested interests interact in setting fees and policies

The independence of rating agencies

The independence of rating agencies Book
Author : Jochen Schweizer
Publisher : GRIN Verlag
Release : 2014-11-12
ISBN : 3656836582
Language : En, Es, Fr & De

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Book Description :

Seminar paper from the year 2011 in the subject Business economics - Controlling, grade: 2,0, Rhine-Waal University of Applied Sciences, language: English, abstract: Since the financial crisis in 2008, rating agencies are in the spotlight. Often they were blamed by politicians and economists for causing the crisis, because they rated some financial products with an excellent grade, without exactly knowing what was really behind these products. To understand why and how Credit Rating Agencies like Standard & Poors, Fitch and Moody's rate, we have to look closer at the CRA and their rating in order to understand how they work. In this research paper I will take a critical look at these institutions. I will talk about the independence of these global oriented enterprises and I will analyze their impact on the financial market and the politics in order to demonstrate why they are so powerful like quoted above.

Credit Rating Agencies

Credit Rating Agencies Book
Author : Mohammed Hemraj
Publisher : Springer
Release : 2015-06-22
ISBN : 3319179276
Language : En, Es, Fr & De

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Book Description :

The book examines the role of credit rating agencies (CRAs) in the subprime mortgage crisis. The CRAs are blamed for awarding risky securities ‘3-A’ investment grade status and then failing to downgrade them quickly enough when circumstances changed, which led to investors suffering substantial losses. The causes identified by the regulators for the gatekeeper failure were conflicts of interest (as the issuers of these securities pay for the ratings); lack of competition (as the Big Three CRAs have dominated the market share); and lack of regulation for CRAs. The book examines how the regulators, both in the US and EU, have sought to address these problems by introducing soft law self-regulation in accordance with the International Organisation of Securities Commissions Code and hard law statutory regulation, such as that found in the “Reform Act” and “Dodd-Frank Act” in the US and similar provisions in the EU. The highly topical book examines these provisions in detail by using a doctrinal black-letter law method to assess the success of the regulators in redressing the problems identified. It also examines the US case law regulation relating to the legal liability of CRAs. The book examines whether the regulations introduced have had a deterrent effect on the actions of CRAs, whether investors are compensated for their losses, and how the regulators have dealt with the issues of conflicts of interest and an anti-competitive environment. Should liability be introduced for CRAs through changes in the law so as to compel them to issue reliable ratings and solve the current problems? The book seeks to simplify the complex issues involved and is backed by concrete evidence; as such, it will appeal to both the well-informed and the lay general public who are interested in learning more about the role of CRAs in the sub-prime mortgage crisis and regulators’ attempts to remedy the situation. Novice readers can familiarise themselves with the legal and financial terminology used by referring to the glossary at the end of the book.

Credit Rating Agencies on the Watch List

Credit Rating Agencies on the Watch List Book
Author : Raquel García Alcubilla,Javier Ruiz del Pozo
Publisher : Oxford University Press
Release : 2012-03-29
ISBN : 0199608865
Language : En, Es, Fr & De

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Book Description :

Rating agencies judge how solvent banks and big companies are. Prior to the financial crisis they were too optimistic when rating the risk of the banks and this prompted politicians worldwide to issue new regulations. This book explains what rating agencies do, why they are so important for the economy, and the new European Regulation.

The Rating Agencies and Their Credit Ratings

The Rating Agencies and Their Credit Ratings Book
Author : Herwig Langohr,Patricia Langohr
Publisher : John Wiley & Sons
Release : 2010-04-01
ISBN : 0470714352
Language : En, Es, Fr & De

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Book Description :

Credit rating agencies play a critical role in capital markets, guiding the asset allocation of institutional investors as private capital moves freely around the world in search of the best trade-off between risk and return. However, they have also been strongly criticised for failing to spot the Asian crisis in the early 1990s, the Enron, WorldCom and Parmalat collapses in the early 2000s and finally for their ratings of subprime-related structured finance instruments and their role in the current financial crisis. This book is a guide to ratings, the ratings industry and the mechanics and economics of obtaining a rating. It sheds light on the role that the agencies play in the international financial markets. It avoids the sensationalist approach often associated with studies of rating scandals and the financial crisis, and instead provides an objective and critical analysis of the business of ratings. The book will be of practical use to any individual who has to deal with ratings and the ratings industry in their day-to-day job. Reviews "Rating agencies fulfil an important role in the capital markets, but given their power, they are frequently the object of criticism. Some of it is justified but most of it portrays a lack of understanding of their business. In their book The Rating Agencies and their Credit Ratings, Herwig and Patricia Langohr provide an excellent economic background to the role of rating agencies and also a thorough understanding of their business and the problems they face. I recommend this book to all those who have an interest in this somewhat arcane but extremely important area." -Robin Monro-Davies, Former CEO, Fitch Ratings. "At a time of unprecedented public and political scrutiny of the effectiveness and indeed the basic business model of the Credit Rating industry, and heightened concerns regarding the transparency and accountability of the leading agencies, this book provides a commendably comprehensive overview, and should provide invaluable assistance in the ongoing debate." -Rupert Atkinson, Managing Director, Head of Credit Advisory Group, Morgan Stanley and member of the SIFMA Rating Agency Task Force "The Langohrs have provided useful information in a field where one frequently finds only opinions or misconceptions. They supply a firm base from which to understand changes now underway. A well-read copy of this monograph should be close to the desk of every investor, issuer and financial regulator, legislator or commentator." -John Grout, Policy and Technical Director, The Association of Corporate Treasurers

The Governance of Credit Rating Agencies

The Governance of Credit Rating Agencies Book
Author : Andrea Miglionico
Publisher : Edward Elgar Publishing
Release : 2019
ISBN : 1786439948
Language : En, Es, Fr & De

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Book Description :

The global crisis revealed that credit rating agencies (CRAs) are capable of bringing about potential distortions in the financial sector, thereby resulting in a reduction in market confidence which, in turn, influences negotiations and expectations. CRAs need to be held accountable for lack of transparency and inaccurate ratings, however the existing regulatory framework does not secure adequate investor protection. This book provides a new and important contribution to research in the area, at a crucial time in the debate around financial regulation and investment regimes.

The Effect of Accrual Quality Real Activities Earnings Management and Corporate Governance on Credit Ratings

The Effect of Accrual Quality  Real Activities Earnings Management and Corporate Governance on Credit Ratings Book
Author : Matthew Geiszler,Kent State University. Department of Accounting,OhioLINK Electronic Theses and Dissertations Center
Publisher : Unknown
Release : 2014
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

One of the most fundamental questions in accounting research is how do different market participants interpret and use the information provided by accountants. Credit rating agencies are major users of financial statements that generate contemporary attention in the accounting literature. As noted by Standard and Poor's, accounting information is a critical element of the credit rating process. In addition, the recent credit crisis has generated increased scrutiny of the credit rating process and the ratings agencies. These issues motivate this study, which examines the effect of accrual quality, real activities earnings management, and corporate governance on credit ratings. The effects of the Credit Rating Agency Reform Act of 2006 (CRARA) and the Dodd-Frank Act (DFA) of 2010 on these associations are also examined. Following the established practice in the literature, accrual (earnings quality) models are used as proxies for the level of accrual quality. Specifically, the modified Jones model (Dechow, Sloan, and Sweeney 1995), the Dechow and Dichev cash flow model (Dechow and Dichev 2002), and Stubben's discretionary revenue model (Stubben 2010) are utilized. Real activities earnings management is measured based on variables used by Roychowdhury (2006) and Cohen and Zarowin (2010). Finally, this study measures corporate governance using the variables outlined in Byard, Li, and Weintrop (2006) and Bebchuk, Cohen, and Ferrell (2009). The results demonstrate that accrual quality is a significant factor in the rating of firms. Firms with lower accrual quality receive lower credit ratings. Real activities earnings management and a firm's level of corporate governance also determine the rating of a firm. Specifically, the results indicate that real activities earnings management related to discretionary expenses (SG&A, advertising, and R&D) are positively associated with ratings. Real activities earnings management related to abnormal production is negatively associated with ratings. Board size, board independence, and the CEO serving as the chairman of the board are positively associated with credit ratings. The relationship between accrual quality and credit ratings decreases in the post CRARA period, which surprisingly may indicate lower reliance on accounting information by the rating agencies during the recent economic recession. Determining the effect of the DFA on the credit rating process seems to be inconclusive and too early to detect.

Regulating Credit Rating Agencies

Regulating Credit Rating Agencies Book
Author : Aline Darbellay,
Publisher : Edward Elgar Publishing
Release : 2013-09-30
ISBN : 085793936X
Language : En, Es, Fr & De

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Book Description :

øŠAline Darbellay analyzes the obvious system relevance of credit rating agencies in depth and assesses the possible options for regulatory responses to this systemic issue. Thereby, the book is based on a fruitful comparative legal approach and formul

Reforming Credit Rating Agencies

Reforming Credit Rating Agencies Book
Author : United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Publisher : Unknown
Release : 2010
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Reforming Credit Rating Agencies book written by United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

Rating the rating agencies

Rating the rating agencies Book
Author : United States,United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Publisher : Unknown
Release : 2003
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Rating the rating agencies book written by United States,United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

Examining the Role of Credit Rating Agencies in the Captial sic Markets

Examining the Role of Credit Rating Agencies in the Captial  sic  Markets Book
Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Release : 2006
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Examining the Role of Credit Rating Agencies in the Captial sic Markets book written by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

The Role of Credit Rating Agencies in Responsible Finance

The Role of Credit Rating Agencies in Responsible Finance Book
Author : Daniel Cash
Publisher : Springer
Release : 2018-12-17
ISBN : 3030037096
Language : En, Es, Fr & De

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Book Description :

This Palgrave Pivot aims to examine the bourgeoning relationship between the Principles for Responsible Investment and the Credit Rating Industry. Since May of 2016, when the partnership was initially publicised, the PRI have endeavoured to incorporate Credit Rating Agencies into its initiative via its ‘ESG in Credit Ratings Initiative’, and have been working diligently to find, and create common ground between Credit Rating Agencies and Institutional Investors seeking to be more forward-looking in their investment approaches. However, in recent years the ‘Big Two’ Credit Rating Agencies – Standard & Poor’s and Moody’s – have finally received record fines for their conduct in the run-up to the Financial Crisis. There is a need, then, to examine the incorporation of the Credit Rating Agencies into such a progressive initiative. To achieve this objective, this book examines the field of ‘responsible investing’, the credit rating industry, and the power dynamic that exists between the rating industry, investors, and the PRI (via its ‘Initiative’).

Assessing the Current Oversight and Operations of Credit Rating Agencies

Assessing the Current Oversight and Operations of Credit Rating Agencies Book
Author : United States,United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Release : 2007
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Assessing the Current Oversight and Operations of Credit Rating Agencies book written by United States,United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

Assessing the Current Oversight and Operations of Credit Rating Agencies

Assessing the Current Oversight and Operations of Credit Rating Agencies Book
Author : United States,United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Release : 2007
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Assessing the Current Oversight and Operations of Credit Rating Agencies book written by United States,United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

Third Party Certifiers

Third Party Certifiers Book
Author : Jan De Bruyne
Publisher : Kluwer Law International B.V.
Release : 2019-07-12
ISBN : 9403510927
Language : En, Es, Fr & De

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Book Description :

Third-Party Certifiers Jan De Bruyne Third-party certifiers are organisations that are independent a requesting entity. They attest that a product, service, information or person possesses certain qualifications or meets safety, quality or technical standards. This important book presents an in-depth analysis of the liability and obligations of certifiers, evaluates existing certification processes in selected fields and proposes new mechanisms which could increase the accuracy and reliability of certifiers’ ratings, marks or reports. Highlighting the risks of errors in this activity – inaccurate certification was a major factor in the global financial crisis of 2008 – the author takes a comparative approach, looking at the certification process in several European countries, Australia and the United States. Such aspects of the process as the following are thoroughly described: obligations and liability of certifiers during the certification process; risk of ‘information asymmetry’ between the requesting entity and the end user; and relationship between the civil liability of certifiers and public law aspects. The analysis includes detailed research on key industries and jurisdictions and a specific proposed framework for more accurate and reliable certification. Because the efficient and effective functioning of third-party certifiers is extremely important in today’s world – especially in such areas as health, the environment, safety or economic values – this deeply researched contribution to an important area of commercial law, combining analysis of current issues with proposed reforms, will be welcomed by practitioners when confronted with legal issues with regard to the certification process. The book’s conceptual framework will also prove highly useful for policymakers charged with developing reliable certification mechanisms.

Rating the rating agencies

Rating the rating agencies Book
Author : United States,United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Publisher : Unknown
Release : 2003
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download Rating the rating agencies book written by United States,United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

Sustainability Rating Agencies vs Credit Rating Agencies

Sustainability Rating Agencies vs Credit Rating Agencies Book
Author : Daniel Cash
Publisher : Springer Nature
Release : 2021-10-23
ISBN : 3030716937
Language : En, Es, Fr & De

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Book Description :

Download Sustainability Rating Agencies vs Credit Rating Agencies book written by Daniel Cash, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.

European Financial Services Law

European Financial Services Law Book
Author : Matthias Lehmann,Christoph Kumpan
Publisher : Nomos Verlag
Release : 2019-04-16
ISBN : 3845279893
Language : En, Es, Fr & De

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Book Description :

Der Band analysiert und erläutert die EU-Rechtsvorschriften für Finanzdienstleistungen. Damit liegt für Rechtsanwälte in internationalen Kanzleien, die Finanzwirtschaft, Regulierungsbehörden und Wissenschaftler ein Referenzwerk für ein tiefgreifendes Verständnis aller relevanten unionsrechtlichen Finanzdienstleistungsregelungen vor. Es dient als Nachschlagewerk, das sowohl komplexe Themen leicht verständlich und übersichtlich darstellt, als auch intensive Analysen schwieriger rechtlicher Fragen bietet. Renommierte Experten erklären, Artikel für Artikel, die wichtigen europäischen Richtlinien und Vorschriften für Finanzdienstleistungen. An vielen Beispielen wird dabei die außerordentliche Bedeutung für die Praxis deutlich. Das Buch untersucht folgende Bereiche: Wertpapierdienstleistungen Marktverhalten Markttransparenz und Informationen Geldanlagen Abrechnungsverkehr Zahlungsdienste Für jeden Fachbereich werden die wichtigsten Richtlinien und Vorschriften besprochen, etwa: MiFID II und MiFIR MAD und MAR Prospekt-Richtlinie PRIIP-VO Transparenz-RL VO über Leerverkäufe Rating Agentur-Verordnung OGAW-Richtlinie und AIFMD EMIR Risikokapitalfonds-RL RL über Finanzsicherheiten RL über die Wirksamkeit von Abrechnungen SEPA-Verordnung.

Sovereign Debt and Rating Agency Bias

Sovereign Debt and Rating Agency Bias Book
Author : D. Tennant,M. Tracey
Publisher : Springer
Release : 2017-08-15
ISBN : 1137391502
Language : En, Es, Fr & De

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Book Description :

Sovereign Debt and Credit Rating Bias rejects the notion that credit rating agencies' rigorous and transparent determination of ratings leaves no room for bias, and debunks the myth that the value CRAs place on their reputational capital precludes prolonged biases. To determine the extent of CRAs' biased actions, Tennant and Tracey apply a rigorous methodology to a well-established economic model of the determinants of sovereign debt quality. They present strong evidence of bias against poor countries and demonstrate how biased rating changes could disadvantage such countries and the companies operating therein as they seek access to international capital markets. They discuss plausible explanations for the bias and suggest remedial measures that would help ensure balance in credit rating changes. This book fills an important gap by rigorously examining a long-standing but often ignored concern about the rating practices of credit rating agencies.

The Role and Impact of Credit Rating Agencies on the Subprime Credit Markets

The Role and Impact of Credit Rating Agencies on the Subprime Credit Markets Book
Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Release : 2009
ISBN : 0987650XXX
Language : En, Es, Fr & De

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Book Description :

Download The Role and Impact of Credit Rating Agencies on the Subprime Credit Markets book written by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs, available in PDF, EPUB, and Kindle, or read full book online anywhere and anytime. Compatible with any devices.