Rating Agency, Financial analysis, market

Issues Relating to Credit Rating Agencies

Understanding the Often-Unsatisfactory Behavior of The Rating Agencies The evidence that emerges from the analyses can lead, more than understandably, to the formation of a negative concept about the agencies, but above all, they weaken those certainties that lead to consider these organizations, essential for the proper functioning of the market. The birth of these

MOODY’S, FITCH and STANDARD & POOR’S

Rating Agencies in a Financial Crisis Approach

Introduction According to the thought of Himan Minsky, an American economist belonging to the Keinian doctrine, who died in 1996, in periods of expansion, when the cash flow of the enterprises exceeds the quota necessary to pay the debts, a speculative euphoria develops. At the origin of the crises there is a displacement, that is,

Systemic Rating

Ratings and Crisis

Introduction Rating Agencies have become increasingly important over the decades, slowly but surely penetrating the “market” system and strongly influencing it. Their importance has increased exponentially since the Eighties, as the development of financial markets reinforced the need for investors to have external support such as Ratings for the need to perceive the size of

Unsolicited Ratings

Procyclical Rating

Introduction The Asian crisis of 1997-1998 and the default wave in 2001 have cast some doubts on the ability of the Agencies to carry out the review of the Ratings. A series of surveys have shown how high the percentage of market operators who are dissatisfied with the slow progress of the Agencies in adjusting

SEC

Rating Operation Problem

Introduction Most of the rating agencies’ problems stem from their inclusion in various regulations relating to the financial system. The rating was included in the regulation of the U.S. financial markets, the most developed today, which have long been the reference for all other financial systems. Today, the Basel 2 agreement marks a step forward:

Reputation mechanism

Operational Problems of Rating Agencies

Introduction It is sufficient to consider even their nature as profit organizations to recognize that there are a series of inconsistencies between the Rating Agencies and the role they are called upon to play. Unfortunately, there are numerous “congenital” errors in the nature of the Agencies, which, especially during periods of economic downturn, have been

Rating Assignment Procedures

The Mechanism Behind Rating Assignment

Introduction The process of assigning the Rating takes place according to a time schedule with phases apparently identical for all the Agencies. The substantial differences mainly concern the mere formal expression of judgment. The process of Rating can start via different procedures: Stimulus by an entity requesting the assignment of a credit Rating for its

post rating criteria

Comparative Analysis of The Evaluation Systems Used by The Main Rating Agencies in The World

Introduction First and foremost, what is a rating agency? Let’s say you want to lend a company some money and get the profit back out of it. You lend that money by buying bonds, which are debt instruments created for the purpose of raising capital, indicating the amount lent, the runtime and the interest rate