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Regulation of Credit Rating Agencies - Different Views and Solutions

Author

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  • Dimitar Rafailov

    (University of Economics - Varna, Varna, Bulgaria)

Abstract

Credit rating agencies are an important element of the informational financial infrastructure, which is essential for the stability of the financial system. In the absence of conflicts of interest and the importance of the established reputation for the rating agencies, self-regulation is sufficient to guarantee high-accuracy ratings. The payment for ratings by issuers and their use in financial regulations create distorted incentives to pursue higher profits at the expense of the quality of ratings. The demonstrated failures of the rating agencies confirm the need for strict regulations to restore investor confidence in the ratings.

Suggested Citation

  • Dimitar Rafailov, 2020. "Regulation of Credit Rating Agencies - Different Views and Solutions," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 9(2), pages 13-22, August.
    • Handle: RePEc:vra:journl:v:9:y:2020:i:2:p:13-22
    DOI: 10.36997/IJUSV-ESS/2020.9.2.13
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    rating agencies; credit ratings; regulation;
    All these keywords.

    JEL classification:

    • 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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