Regulating Credit Rating Agencies

Author: Aline Darbellay
Publisher: Edward Elgar Publishing
ISBN: 9780857939357
Published In: October 2013
Format: Hardback , 296 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

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This highly topical book examines how the leading credit rating agencies – Moody's, Standard & Poor's and Fitch – have risen to prominence in the wake of the financial crisis.

It investigates how the Big Three have become ever more profitable even though the quality of their ratings has declined and rating scandals have tarnished their reputation. After a century of being left quasi-unregulated the rating industry is now subject to sweeping reforms. This informative study analyses the post-crisis overhaul in the United States and the European Union. The focus lies on the interactions between regulatory intervention and competitive incentives among the Big Three. This book highlights the challenges faced by policymakers trying to regulate the rating industry and simultaneously decrease over-reliance on ratings.

Regulating Credit Rating Agencies will appeal to academics in law and economics, practitioners, policymakers, lawmakers and regulators.

Contents: Part I: Prelude to the Credit Rating Industry 1. Introduction 2. History of Credit Rating Agencies 3. Description of the Credit Rating Industry Part II: Regulatory Structure 4. Rating-based Regulations 5. Regulatory Treatment of Credit Rating Agencies 6. Regulatory Trends Part III: Uses and Abuses of Credit Ratings in Structured Finance 7. Growth of the Structured Finance Segment 8. Wrong Incentives in the Credit Rating Industry 9. Regulatory Response to the Problems of Structured Finance Ratings Part IV: System-wide Effects of Credit Rating Downgrades 10. System-relevance of Credit Ratings 11. Market Reactions to Credit Rating Downgrades and their Consequences 12. Regulatory Response to the Systemic Issue Part V: Trends and Outlook 13. Restoring Competition in the Credit Rating Industry 14. Concluding Remarks Bibliography Index

Aline Darbellay, University of Zurich, Switzerland and University of San Diego, US

‘Aline 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 formulates guidance principles for regulators, particularly addressing alternatives for restoring competition in the credit rating industry.’
– Rolf Weber, The University of Zurich, Switzerland