The Role Of Credit Rating Agencies In The Structured Finance Market

Author : Anonym
Publisher : GRIN Verlag
Page : 57 pages
File Size : 54,8 Mb
Release : 2009-07-23
Category : Electronic
ISBN : 9783640380237

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The Role of Rating Agencies in Structured Finance by Anonym Pdf

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 : 55,5 Mb
Release : 2008
Category : Credit ratings
ISBN : STANFORD:36105050470512

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The Role of Credit Rating Agencies in the Structured Finance Market by United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises Pdf

Author : United States House of Representatives,Committee on Financial Services (house),United S. Congress
Publisher : Unknown
Page : 180 pages
File Size : 54,5 Mb
Release : 2019-10-19
Category : Electronic
ISBN : 1700794299

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The Role of Credit Rating Agencies in the Structured Finance Market by United States House of Representatives,Committee on Financial Services (house),United S. Congress Pdf

The role of credit rating agencies in the structured finance market: hearing before the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises of the Committee on Financial Services, U.S. House of Representatives, One Hundred Tenth Congress, first session, September 27, 2007.

Author : Herwig M. Langohr,Patricia Langohr
Publisher : John Wiley & Sons
Page : 662 pages
File Size : 42,7 Mb
Release : 2008
Category : Business & Economics
ISBN : STANFORD:36105132277661

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The Rating Agencies and Their Credit Ratings by Herwig M. Langohr,Patricia Langohr Pdf

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 : Herwig Langohr,Patricia Langohr
Publisher : John Wiley & Sons
Page : 524 pages
File Size : 44,5 Mb
Release : 2010-04-01
Category : Business & Economics
ISBN : 9780470714355

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The Rating Agencies and Their Credit Ratings by Herwig Langohr,Patricia Langohr Pdf

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 : Markus Krebsz
Publisher : John Wiley & Sons
Page : 594 pages
File Size : 48,7 Mb
Release : 2011-05-18
Category : Business & Economics
ISBN : 9780470662120

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Securitization and Structured Finance Post Credit Crunch by Markus Krebsz Pdf

In this book, you will be introduced to generic best practice principles for a post credit crunch market. First, the book takes a closer look at the reasons why the market froze during the 2007 to 2009 credit crisis. Then you will learn how to use the principles explained here in your generic deal's typical life cycle stages. Throughout, each stage is discussed in detail, from strategy and feasibility, pre-close, at close, and post close. The final section of the book contains a toolbox of references, tables, dictionaries, and resources.

Author : Brian P. Lancaster,Glenn M. Schultz,Frank J. Fabozzi
Publisher : John Wiley & Sons
Page : 545 pages
File Size : 43,6 Mb
Release : 2008-06-20
Category : Business & Economics
ISBN : 9780470369234

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Structured Products and Related Credit Derivatives by Brian P. Lancaster,Glenn M. Schultz,Frank J. Fabozzi Pdf

Filled with the insights of numerous experienced contributors, Structured Products and Related Credit Derivatives takes a detailed look at the various aspects of structured assets and credit derivatives. Written over a period spanning the greatest bull market in structured products history to arguably its most challenging period, this reliable resource will help you identify the opportunities and mitigate the risks in this complex financial market.

Author : Aline Darbellay,
Publisher : Edward Elgar Publishing
Page : 292 pages
File Size : 48,7 Mb
Release : 2013-09-30
Category : Business & Economics
ISBN : 9780857939364

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Regulating Credit Rating Agencies by Aline Darbellay, Pdf

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 : Francesco De Pascalis
Publisher : BRILL
Page : 245 pages
File Size : 53,7 Mb
Release : 2017-06-26
Category : Business & Economics
ISBN : 9789004341852

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Credit Ratings and Market Over-reliance by Francesco De Pascalis Pdf

7.1.3 Evidence of Over-reliance on Credit Rating Legislative References -- 7.2 Anticipating the Post-crisis Debate on Over-reliance -- 7.2.1 CRA Message to the Regulators -- 7.2.2 CRA Message to the Users of Credit Ratings -- Concluding Remarks -- 8 Conclusions -- 8.1 Taking Stock of the Situation -- 8.2 Developing an Assertion into Certainty: Providing Evidence of Over-reliance -- 8.3 Encouraging More Dialogue and Coordination at All Levels -- 8.4 Ensuring More of a Level-playing Field among Credit Risk Assessment Tools -- 8.5 Looking Ahead -- Concluding Remarks -- Bibliography -- Index

Author : Muddassar Rasheed Malik
Publisher : GRIN Verlag
Page : 5 pages
File Size : 54,8 Mb
Release : 2019-02-18
Category : Business & Economics
ISBN : 9783668879164

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The role of credit rating agencies. A blessing or a curse by Muddassar Rasheed Malik Pdf

Seminar paper from the year 2011 in the subject Economics - Finance, , course: Bank Financial Management, language: English, abstract: This report is examining the role of credit rating agencies and in further details arguments in its favor and against its favor are examined. In the beginning the role of credit rating agencies is defined and later methodological approaches to this topic are discussed, and afterwards, an analysis of pros and cons of credit rating agencies is conducted. To the end recommendations and suggestions to credit rating agencies for better performances are listed. Generally, credit rating agencies are playing vital role in markets and they united dispersed information comprehensively. Through this approach it is easier for investors or issuers to understand the real position of different concerns before taking any final decisions, beside this fact it is also in observation that credit rating agencies have some flaws which need to be addressed, like favoritism and unsolicited credit rating issuance. It is recommended to have transparency, scheduled active ratings and strict follow up with regulated authorities.

Author : Stefano Caselli,Stefano Gatti
Publisher : Springer
Page : 215 pages
File Size : 47,9 Mb
Release : 2017-10-09
Category : Business & Economics
ISBN : 9783319541242

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Structured Finance by Stefano Caselli,Stefano Gatti Pdf

This book, now in its second edition, provides an in-depth overview of all segments of the structured finance business, with particular reference to market trends, deal characteristics and deal structuring. The goal is to assist readers in gaining a clear understanding of the common features of structured finance transactions. The process of deal structuring for each type of transaction is carefully analyzed, with extensively updated chapters on asset securitization, project finance, structured leasing transactions and leveraged acquisitions. In the new edition, particular attention is paid to novel areas of intervention, such as public–private partnerships and non-performing loans in the resolution of bank restructuring. Although the subject of much criticism, structured finance, when used properly, offers an effective solution to the credit crunch that many European countries are suffering and is also a way to revive a single capital market for debt instruments. Readers will find this book to be an illuminating guide to the business and to the best market practices in organizing transactions. It will be of value for BSc and MSc finance students, professionals and consultants alike.

Author : Giovanni Majnoni,Richard M. Levich,Carmen Reinhart
Publisher : Springer Science & Business Media
Page : 400 pages
File Size : 48,6 Mb
Release : 2002-08-31
Category : Business & Economics
ISBN : 1402070160

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Ratings, Rating Agencies and the Global Financial System by Giovanni Majnoni,Richard M. Levich,Carmen Reinhart Pdf

The business of credit ratings began in the United States in the early 1900s. Over time, credit ratings have gradually taken on an expanding role, both in the United States and abroad and in official financial market regulation as well as in private capital market decisions. However, in 1999 the Bank for International Settlements (through its Committee on Banking Supervision) proposed rule changes that would provide an explicit role for credit ratings in determining a bank's required regulatory risk capital. Once implemented, this BIS proposal (often referred to as Basel 2) would vastly elevate the importance of credit ratings by linking the required measure of bank capital to the credit rating of the bank's obligors. With these regulatory changes under active discussion, research into the role for ratings and rating agencies in the global financial system is particularly apropos. Ratings, Rating Agencies and the Global Financial System brings together the research of economists at New York University and the University of Maryland, along with those from the private sector, government bodies, and other universities. The first section of the volume focuses on the historical origins of the credit rating business and its present day industrial organization structure. The second section presents several empirical studies crafted largely around individual firm-level or bank-level data. These studies examine (a) the relationship between ratings and the default and recovery experience of corporate borrowers, (b) the comparability of credit ratings made by domestic and foreign rating agencies, and (c) the usefulness of financial market indicators for rating banks, among other topics. In the third section, the record of sovereign credit ratings in predicting financial crises and the reaction of financial markets to changes in credit ratings is examined. The final section of the volume emphasizes policy issues now facing regulators and credit rating agencies.

Author : Mohammed Hemraj
Publisher : Springer
Page : 266 pages
File Size : 48,8 Mb
Release : 2015-06-22
Category : Law
ISBN : 9783319179278

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Credit Rating Agencies by Mohammed Hemraj Pdf

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 : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Page : 152 pages
File Size : 54,8 Mb
Release : 2009
Category : Business & Economics
ISBN : UOM:39015090376370

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The Role and Impact of Credit Rating Agencies on the Subprime Credit Markets by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs Pdf

Author : Janet M. Tavakoli
Publisher : John Wiley & Sons
Page : 590 pages
File Size : 44,7 Mb
Release : 2008-09-22
Category : Business & Economics
ISBN : 9780470443446

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Structured Finance and Collateralized Debt Obligations by Janet M. Tavakoli Pdf

An up-to-date look at the exploding CDO and structured credit products market In this fully updated Second Edition, financial expert Janet Tavakoli provides readers with a comprehensive look at the CDO and structured credit products market amid recent developments. In addition to a detailed overview of the market, this book presents key issues in valuing structured financial products and important quality control issues. Tavakoli shares her experiences in this field, as she examines important securitization topics, including the huge increase in CDO arbitrage created by synthetics, the tranches most at risk from new technology, dumping securitizations on bank balance sheets, the abuse of offshore vehicles by companies, the role of hedge funds, critical issues with subprime, Alt-A, and prime mortgage securitizations, and securitizations made possible by new securitization techniques and the Euro. While providing an overview of the market and its dynamic growth, Tavakoli takes the time to explore the types of products now offered, new hedging techniques, and valuation and risk/return issues associated with investment in CDOs and synthetic CDOs.