CREDIT RATING AGENCIES AS AN ELEMENT OF FINANCIAL INFRASTRUCTURES: A POLITICAL ECONOMIC APPROACH

A “sarbanes-oxley” for Credit Rating Agencies? a Comparison of the Roles Auditors’ and Credit Rating Agencies’ Conflicts of Interests Played in Recent Financial Crises

Both auditors and credit rating agencies have been linked to financial scandals in recent history. In the early 2000’s, several of the “big five” accounting firms issued favorable audit opinions to public companies employing deceptive accounting practices. Some of these companies even committed outright fraud. Once the investing public caught wind of these accounting irregularities, it lost tru...

The Optimal Regulation of Credit Rating Agencies

Credit rating agencies (CRAs) very often have been criticized for announcing inaccurate credit ratings and are suspected of being exposed to con‡icts of interest. Despite these objections CRAs remained largely unregulated. Based on Pagano & Immordino (2007), we study the optimal regulation of CRAs in a model where rating quality is unobservable and enforcing regulation is costly. The model show...

Predicting Credit Rating and Credit Rating Changes: A New Approach

In this paper, we propose a hazard rate model for studying credit rating and credit rating changes. Theoretically the hazard rate model is more appropriate than the previous static models. Yet it is difficult to estimate hazard rate model, especially when the covariates are time-varying. This paper extends the results of Shumway(2001) and shows that a multiple-state hazard rate model can be est...

An Assessment of Two Economic Rationales for Export Credit Agencies

Property-liability Insurer Financial Strength Ratings: Differences across Rating Agencies

Regulators, investors, consumers, and insurance brokers use insurer financial strength ratings to evaluate the insolvency risk of insurers. This article investigates the factors influencing the decision to obtain a rating or multiple ratings, the determinants of ratings for the three major insurer rating agencies, and reasons for differences in ratings across agencies. This study indicates that...