Economic and Financial, Regulation and Supervision

Time to revisit the Governance of Rating Agencies?

Among the many reforms instituted in the aftermath of the financial crisis of 2008, dealing with the weaknesses embedded in the operations of Rating Agencies emerged among the main priorities. Both in the United States and Europe a battery of legislative measures were adopted covering their accreditation, their transparency (publication of their methodologies), their responsibility and their supervision which together form a coherent “regulatory” environment in which these Agencies now operate. It is appropriate to recall that the purpose of “ratings” is to provide assistance (and not serve as a substitute) for evaluating risks associated with the timely service of debts of a given issuer. The 2008 crises, (linked to the failure of subprime debts in the USA) had brought…

Continue reading