Rating agencies and the fallout of the 2007-2008 financial crisis

This book examines rating agencies role in the recent financial crisis and proposed reforms. It summarizes the key causes that have led to the crisis, analyzes points of criticism and accusations leveled at rating agencies, and discusses proposals towards regulatory reform. The author takes rating agencies position regarding these accusations and proposals into account. In contrast to other studies focusing only on US and EU regulatory issues, this study also considers whether responses from other countries could deliver a feasible path in adopting new regulations. The author examines in a cross-country qualitative manner stakeholder perceptions with respect to rating agencies. Based on empirical findings the study discusses how perceived or revealed shortcomings can be solved.-- Read more... This book examines rating agencies role in the recent financial crisis and proposed reforms. It summarizes the key causes that have led to the crisis, analyzes points of criticism and accusations leveled at rating agencies, and discusses proposals towards regulatory reform. The author takes rating agencies position regarding these accusations and proposals into account. In contrast to other studies focusing only on US and EU regulatory issues, this study also considers whether responses from other countries could deliver a feasible path in adopting new regulations. The author examines in a cross-country qualitative manner stakeholder perceptions with respect to rating agencies. Based on empirical findings the study discusses how perceived or revealed shortcomings can be solved.-- Provided by Publisher

This book examines rating agencies role in the recent financial crisis and proposed reforms. It summarizes the key causes that have led to the crisis, analyzes points of criticism and accusations leveled at rating agencies, and discusses proposals towards regulatory reform. The author takes rating agencies position regarding these accusations and proposals into account. In contrast to other studies focusing only on US and EU regulatory issues, this study also considers whether responses from other countries could deliver a feasible path in adopting new regulations. The author examines in a cross-country qualitative manner stakeholder perceptions with respect to rating agencies. Based on empirical findings the study discusses how perceived or revealed shortcomings can be solved.

Acknowledgements 7 Abstract 9 Table of Contents 11 Abbreviations 17 List of Figures and Tables 21 Introduction 23 1. What Caused the Economic and Financial Crisis 2007–2008? 29 2. The Crisis of 2007–2008 39 3. The Rating Agencies’ Defense – A Critical Review 65 4. The Rating Process 93 5. Rating Agencies and Price Determination in Financial Markets 121 6. Regulators, Regulations, and Price Determination in Financial Markets 141 7. Responses to Rating Agencies Shortcomings 167 8. Empirical Research: Design and Methodology 195 9. Empirical Research: Results 205 10. Discussion, Further Research, Limitations, and Conclusion 223 Conclusion 245 References 247 Rating,Agencies,and,the,Fallout,of,the,2007-2008,Financial,Crisis Rating agencies have been accused of exacerbating the financial crisis 2007–2008, triggering calls to regulate rating agencies to ensure transparency and competiveness. This highly informative study discusses theoretically and investigates empirically how revealed shortcomings can be solved and what proposals should be advanced or implemented. Causes of the crisis 2007-2008 - Rating agencies defense - Rating process - Structured finance - Rating agencies and price determination in financial markets - Regulators, regulations, and price determination - US regulatory issues - Responses from Europe, Canada, India and Asian Pacific countries - Empirical cross-country research