IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Regulating credit ratings agencies: where to now?

Listed author(s):

This paper reviews current proposals to regulate credit rating agencies. They proposals can be classified in two broad areas: (1) micro-prudential measures and (2) measures to expand and refine the regulatory perimeter. While the previous regulations relied on micro-prudential measures, experience from the U.S. subprime crisis and the European sovereign debt crisis shows that such an approach did not address the negative externalities from credit ratings, prompting the need to expand the regulatory perimeter. This paper highlights two types of regulation seeking to expand the regulatory perimeter: (i) those that attempt to take credit ratings out of regulation such as Section 939A of the 2010 Dodd-Frank Act and (ii) those that aim to reduce the importance of credit ratings in regulation such as the recent changes to the ECB collateral rules. This paper argues, however, that, it remains important that policymakers conduct formal assessments of the impact of the use of credit ratings on financial markets, especially in private contracts such as credit default swaps (CDS) and institutional investors’ investment policies. Additional capital requirements and/or liquidity buffers could be used if necessary to mitigate the systemic risk of credit ratings.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: no

Article provided by Capco Institute in its journal Journal of Financial Transformation.

Volume (Year): 31 (2011)
Issue (Month): ()
Pages: 141-150

in new window

Handle: RePEc:ris:jofitr:1444
Contact details of provider: Postal:
77 Water Street, 10th Floor, New York NY 10005

Phone: +1 212 284 8600
Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:1444. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Shahin Shojai)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.