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Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Page : 152 pages
File Size : 45,9 Mb
Release : 2009
Category : Business & Economics
ISBN : UOM:39015090376370
Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Page : 145 pages
File Size : 40,9 Mb
Release : 2009
Category : Credit ratings
ISBN : OCLC:605961314
Author : Anonym
Publisher : GRIN Verlag
Page : 57 pages
File Size : 44,6 Mb
Release : 2009-07-23
Category : Electronic
ISBN : 9783640380237
Essay from the year 2008 in the subject Business economics - Investment and Finance, grade: 2,2, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, course: Introduction to Investment Banking, language: English, abstract: "There are two superpowers in the world ...] the United States and Moody's Bond Rating Service" - Thomas L. Friedman, NY Times The above statement by Thomas L. Friedman accentuates the importance of credit rating agencies (CRAs) in modern financial markets. As the past months have shown, Friedman's statement has held especially true for the role of CRAs in the structured finance market, where CRAs are currently being made responsible for playing an integral role in the emergence of one of the biggest financial crises of mankind: the subprime crisis. The role and the importance of CRAs in the structured finance market is the central topic of the following paper. To fully understand the impact of this issue on the worldwide financial markets, it is interesting to shed some light onto the dimensions of the structured finance market. The market is of considerable size given that outstanding structured finance securities in the United States amounted to 7.3 trillion US dollars in 2005 (Nomura, 2005) and have now grown to 9 trillion US dollars, which is more than two thirds of the United States GDP of 13.1 trillion US dollars in 2007 (U.S. Bureau of Economic Analysis, BEA, 2007). More-over, these outstanding structured finance securities represent more than 30% of the total outstandings in the U.S. bond markets (Nomura, 2005). As these figure reveal, it is not surprising that complications in the core of the huge market of structured finance could potentially lead to a major destabilisation of the entire worldwide financial markets; a risk that was obviously underestimated for a long time and finally lead to the genesis of the sub-prime crisis. The role of CRAs in the structured finance market has long been debat
Author : United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Publisher : Unknown
Page : 184 pages
File Size : 54,7 Mb
Release : 2008
Category : Credit ratings
ISBN : STANFORD:36105050470512
Author : Herwig Langohr,Patricia Langohr
Publisher : John Wiley & Sons
Page : 524 pages
File Size : 52,6 Mb
Release : 2010-04-01
Category : Business & Economics
ISBN : 9780470714355
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
Author : Herwig M. Langohr,Patricia Langohr
Publisher : John Wiley & Sons
Page : 662 pages
File Size : 40,8 Mb
Release : 2008
Category : Business & Economics
ISBN : STANFORD:36105132277661
This title 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.
Author : Mohammed Hemraj
Publisher : Springer
Page : 266 pages
File Size : 46,5 Mb
Release : 2015-06-22
Category : Law
ISBN : 9783319179278
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.
Author : Anonim
Publisher : DIANE Publishing
Page : 646 pages
File Size : 42,5 Mb
Release : 2011
Category : Electronic
ISBN : 9781437984675
Author : Aline Darbellay,
Publisher : Edward Elgar Publishing
Page : 292 pages
File Size : 53,7 Mb
Release : 2013-09-30
Category : Business & Economics
ISBN : 9780857939364
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
Author : Malte Henrik Klein
Publisher : GRIN Verlag
Page : 45 pages
File Size : 48,7 Mb
Release : 2016-03-11
Category : Business & Economics
ISBN : 9783668171251
Bachelor Thesis from the year 2010 in the subject Economics - International Economic Relations, grade: 2.0, University of Osnabrück, language: English, abstract: To understand the roots of the capital markets and the rating agencies I want to start this Bachelor Thesis with a historical development. With introduction of the Issuer Pays Model and the proclamation of so called NRSROs there is the starting point for a long time discussion within the credit rating industry. Then I want to introduce the case of Enron, a former energy conglomerate which has been wrongly rated by the rating agencies. I want to investigate if there are any parallels to the crisis of 2007. I also want to understand and show the reasons and the structure of the crisis of 2007. So I will introduce the Subprime market and structured finance, as these topics were probably the triggers for the crisis. The main part of my thesis is to find an explanation for the performance of the credit rating agencies. I use a theoretical model which stresses the complexity of assets. The model says that the more complex an asset is, the harder it is to rate for the agencies. In opposite to that I want to compare the results of the theoretical model with an empirical study. I want to investigate if the theoretical model gets the same result as the empirical approach or if there are huge differences. At last I want to introduce some solution proposals by myself and think about further approaches.
Author : Constantin Jäkel
Publisher : GRIN Verlag
Page : 20 pages
File Size : 42,7 Mb
Release : 2011-07-15
Category : Business & Economics
ISBN : 9783640959402
Seminar paper from the year 2011 in the subject Economics - Finance, grade: 1.3, Berlin School of Economics and Law, language: English, abstract: After the Asian crisis during the 1990s and the startling insolvencies of Enron and Parmalat, the recent financial crisis is one the most important trigger to raise doubt concerning the proper work of rating agencies. They are criticized because of their various conflicts of interest and obvious deficits in practicing their rating methods. The rating agencies should be jointly responsible for the emergence of the so-called bubble markets during the last couple of years. Because of these bubbles and their boom and burst effect, private as well as institutional investors lost enormous sums of assets and single countries were thrown into financial turmoil. Because of these facts, the discontent concerning the rating agencies grew. People took additional notice of their market power, which they only obtained because of their influence on the global capital flows and the use of ratings to regulate the financial markets. To particularize the issues, it is helpful to bring up the year 2007, when the delayed payments among the subprime loans became more frequent. This was due to the slower increase of the housing prices and the rising short-termed interest. Consequently, the rating agencies depreciated a lot of these structured financial products, many of which had received the highest seal of quality before (AAA). Those actions both led to a massive loss of confidence on the investors’ side and a remarkable decline of liquidity. The former market of securitization products no longer existed. Influenced by this development and because they were considerable involved in this securitization business, a lot of banks also got into this downstream. In the first part of this term paper I will present some general facts about the rating agencies including their history of origins. Afterwards I will mention the process of rating and the problems, which led to the misconduct during the crisis. This will also include a discussion concerning the IOSCO Code of Conduct and the deduced implications concerning the malfunction of the rating agencies. Last but not least I will give a conclusion and suggest some essential aspects which should be implemented from the rating agencies.
Author : Daniel Cash
Publisher : Taylor & Francis
Page : 122 pages
File Size : 49,7 Mb
Release : 2023-09-22
Category : Business & Economics
ISBN : 9781000961751
This book aims to present a picture of one of the world’s leading credit rating agencies. Credited as being the first credit rating agency, Moody’s stands as the epitome of the rating sector and all that it effects. However, outside of internal and non-public histories compiled within the rating agency itself, the story of Moody’s has never been told, until now. However, this is not a historical book. Rather, this book paints a picture of Moody’s on a wider canvas that introduces the concept of rating to you, taking into account the origins of the sector, the competitive battles that formed the modern-day oligopoly, and the characters that have each taken their turn on sculpting the industry that, today, is critical to the modern economy. The book is a story of personable people who provided the market with what it needed, but it is more than that. It is a story of conflict, impact, strategy, and most of all the relationship between big business and modern society. Standing as the gatekeeper to the capital markets that form the core of modern society, Moody’s represents the very best of what the marketplace can produce, but also the very worst. This story takes in economic crises in the antebellum US, the Panics of the early 1900s, the Wall Street Crash and the Great Depression and, of course, the Global Financial Crisis. It does this because, at the heart of each one was a member of the rating industry or the reporting industry that preceded it. Associated with almost any financial scandal you may care to remember the credit rating agencies, in their often-uncomfortable role as gatekeepers, have their fingerprints on most financial scandals and calamities. This book tells the story of the industry’s founding member.
Author : Alexej Eichmann
Publisher : GRIN Verlag
Page : 25 pages
File Size : 45,7 Mb
Release : 2015-11-03
Category : Business & Economics
ISBN : 9783668079885
Fachbuch aus dem Jahr 2015 im Fachbereich VWL - Geldtheorie, Geldpolitik, Note: 1,3, FOM Essen, Hochschule für Oekonomie & Management gemeinnützige GmbH, Hochschulleitung Essen früher Fachhochschule, Sprache: Deutsch, Abstract: This assignment analyses the impact of Credit Rating Agencies on the financial market focusing on corporate institutions. In the case of Enron, a former American energy, commodities and services company, it received good credit ratings up until four days before bankruptcy. Other examples like Lehman Brothers or WorldCom show, that Moody's, S&P and Fitch still rated these companies as safe investments days before their bankruptcy. Credit Rating Agencies influence about 80% of the world market capital. The industry is dominated by S&P and Moody's which lead to a lack of competition. Ratings have an impact on the overall economic performance, recently proofed by the financial crisis caused in the US subprime mortgage market. The conflict of interest occurs from the issuer-pay model where almost all credit ratings are paid by the issuer of the instrument. CRAs are governed by the International Organization of Securities Commissions (IOSCO) which established a "Code for Conduct Fundamentals" for CRAs, a voluntary code without enforcement mechanisms. Authorities have responded with a range of regulatory reforms. There is currently no consensus on a common set of reform. The overall rating agencies do not take any responsibility for damage caused to governments or investors.
Author : Ahmed Harfouf
Publisher : GRIN Verlag
Page : 56 pages
File Size : 48,9 Mb
Release : 2017-07-20
Category : Business & Economics
ISBN : 9783668487857
Research Paper (undergraduate) from the year 2011 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 2:0, Kingston University London, language: English, abstract: The research is covering the three major credit rating agencies(S&P, Moody's and Fitch) and their involvement in the 2008 economic crisis The worldwide financial crisis has thrust credit rating agencies into the spotlight. The purpose of this study was to investigate the Credit Rating Agencies credibility after the crisis and the role they play in the global investment and financial markets. Another aim was to find out how the Credit Rating agencies were implicated in the crisis. Finally an explanation of the different aspects of rating process was given in the study. As an explanatory research, a case study analysis method was applied. This method was carried out by opting for a documentary analysis which relies highly on qualitative data. This research initiative currently under consideration can be seen as an effort to summarise the current reputation of Credit Rating Agencies and answer the question whether their credibility was affected or not. The results of the study discover that the credibility of Credit rating agencies was affected by the financial crisis, and this was due to its implication in this crisis by implying a non accurate methodology process for products assessment. The principal conclusion was that the credit rating agencies had a slight loss on their credibility after the financial crisis, but due to their previous role in sustaining the world financial markets and the need of market assessment by investors give another chance to restore this credibility.
Author : Adam B. Ashcraft
Publisher : DIANE Publishing
Page : 76 pages
File Size : 45,6 Mb
Release : 2010-03
Category : Electronic
ISBN : 9781437925142
Provides an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. Discusses the ways that market participants work to minimize these frictions and speculate on how this process broke down. Continues with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. Presents the key structural features of a typical subprime securitization, documents how rating agencies assign credit ratings to mortgage-backed securities, and outlines how these agencies monitor the performance of mortgage pools over time. The authors draw upon the example of a mortgage pool securitized by New Century Financial during 2006. Illustrations.
