Addicted to Ratings: The Case for Reducing Governments’ Reliance on Credit Ratings
AbstractCredit rating agencies have been blamed for their role in the recent financial crisis, notably for having assigned high ratings to complex financial instruments that yielded billions in losses to investors. As a consequence, a number of reforms have been proposed or introduced – including for example increased disclosure of rating methodologies. This Backgrounder argues that reducing the government use of credit ratings may be the single most important step towards restoring the credibility and integrity of rating agencies.
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Bibliographic InfoArticle provided by C.D. Howe Institute in its journal C.D. Howe Institute Backgrounder.
Volume (Year): (2010)
Issue (Month): 130 (May)
Financial Services; credit-rating agencies (CRAs); third party credit risk assessment; nationally recognized statistical rating organizations (NRSROs);
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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- David Johnson, 2007. "School Grades: Identifying Albert's Best Public Schools," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 104, September.
- Colin Busby, 2010. "Supporting Employees who Deploy: The Case for Financial Assistance to Employers of Military Reservists," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 123, January.
- Lawson A.W. Hunter, Q.C. & Edward Iacobucci & Michael J. Trebilcock, 2010. "Scrambled Signals: Canadian Content Policies in a World of Technological Abundance," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 301, January.
- Michael Parkin, 2010. "How Soon? How Fast? Interest Rates and Other Monetary Policy Decisions in 2010," e-briefs 92, C.D. Howe Institute.
- Philippe Bergevin, 2010. "Change is in the Cards: Competition in the Canadian Debit Card Market," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 125, February.
- Pierre Siklos, 2010. "Taking Monetary Aggregates Seriously," e-briefs 94, C.D. Howe Institute.
- William B.P. Robson & Colin Busby, 2010. "Freeing up Food: The Ongoing Cost, and Potential Reform, of Supply Management," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 128, April.
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