User:Nick Gardner /Sandbox: Difference between revisions

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Where a company issues
{{AccountNotLive}}
fixed income securities to be traded on a public market, the issuer may ask a CRA to provide
==Index and Glossary==
a credit rating for those securities to make them more marketable. In many cases, potential
There is an index to the topics dealt with in the economics articles [[Economics/Related Articles|here]], and a glossary of economic terms [[Economics/Glossary|here]].
investors may expect an issuer or security to be covered by several CRAs. Investors also
may operate under guidelines or legal requirements that prohibit the investor from holding a
debt security that is not rated at or above a certain level by one or more CRAs
Credit rating agencies provide a third party rating based on access to more information about the borrower than a lender may be able to access, and on accumulated experience in evaluating credit.


ratings serve as a regulatory tool in financial market oversight – one
See also the [[Politics/Index|'''index to the politics articles ''']].
speaks of ‘rating-based regulation’. This is often called the certification function. In this view,
rating agencies not only assign a credit evaluation but they also issue a ‘license’ to access
the capital markets or to lower regulatory burdens (Partnoy 1999, pp. 683-88). lowers the risk premium required by the investors


there is evidence that all types of rating announcements – outlooks, reviews and rating
[[User:Nick_Gardner#Methodology|methodology]]
changes, whether positive or negative – have a significant impact on CDS prices.
The Credit Rating Industry:
Competition and Regulation
Inauguraldissertation
zur
Erlangung des Doktorgrades
der Wirtschafts- und Sozialwissenschaftlichen Fakultät
der Universität zu Köln
2007
vorgelegt
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=991821


Statement by
{|align="right" cellpadding="10" style="background-color:#FFFFCC; width:40%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
Lawrence J. White*
|"''The European Union is something ...
for the
very precious, not only for us in Europe, but also for the rest of the world. Because the European Union is, in fact, the result of a project for peace that brought together nations emerging from the ruins of the Second World War. It was the European Union that united them in peace around the values of respect for human dignity, freedom, democracy, justice, rule of law and respect for human rights.''"
“Roundtable to Examine Oversight of Credit Rating Agencies”
U.S. Securities and Exchange Commission
Washington, DC
April 15, 2009
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=89e91cf4-71e2-406d-a416-0e391f4f52b0&Witness_ID=f6d7b43b-1747-4756-acc8-435aa501a87c
(Statements about history)


 
:Merci Olsson, of Nobel Med, congratulating  President Barroso on the award of The Nobel Peace Prize t the European Union, 12 October 2012.
 
|}
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=900257
How and Why Credit Rating Agencies are Not Like Other Gatekeepers
Frank Partnoy
University of San Diego School of Law
"Credit rating agencies
are not widely respected among sophisticated market participants,"
Since 1973 credit ratings have been incorporated into hundreds of rules,
releases, and regulatory decisions, in various substantive areas including securities,
pension, banking, real estate, and insurance regulation
 
FINANCIAL GATEKEEPERS: CAN THEY PROTECT INVESTORS?, Yasuyuki Fuchita, Robert E. Litan, eds., Brookings Institution Press and the Nomura Institute of Capital Markets Research, 2006
San Diego Legal Studies Paper No. 07-46
 
 
The Paradox of Credit Ratings  Frank Partnoy
U San Diego Law & Econ Research Paper No. 20 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=285162
Numerous academic studies show that ratings changes lag the market
and that the market anticipates ratings changes.3 The rejoinder to these studies – that
ratings are correlated with actual default experience – is misplaced and inadequate,
because ratings can be both correlated with default and have little informational value.
Accordingly, such correlation proves nothing. Indeed, it would be surprising to find that
ratings – regardless of their informational value – were not correlated with default
 
:''There are two superpowers in the world today in my opinion. There’s the
United States and there’s Moody’s Bond Rating Service. The United States can
destroy you by dropping bombs, and Moody’s can destroy you by downgrading
your bonds. And believe me, it's not clear sometimes who's more powerful.''
(Thomas L. Friedman, in an interview  ith Jim Lehrer on ''Newshour'', PBS television, Feb. 13, 1996).

Latest revision as of 04:28, 22 November 2023


The account of this former contributor was not re-activated after the server upgrade of March 2022.


Index and Glossary

There is an index to the topics dealt with in the economics articles here, and a glossary of economic terms here.

See also the index to the politics articles .

methodology

"The European Union is something ... 
very precious, not only for us in Europe, but also for the rest of the world. Because the European Union is, in fact, the result of a project for peace that brought together nations emerging from the ruins of the Second World War. It was the European Union that united them in peace around the values of respect for human dignity, freedom, democracy, justice, rule of law and respect for human rights."
Merci Olsson, of Nobel Med, congratulating President Barroso on the award of The Nobel Peace Prize t the European Union, 12 October 2012.
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