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Author: Ahmed Naciri
Publisher: Routledge
ISBN: 1317634365
Category : Business & Economics
Languages : en
Pages : 253
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Book Description
Credit rating agencies play an essential role in the modern financial system and are relied on by creditors and investors on the market. In the recent financial crisis, their power and reliability were often questioned, yet a simple rating downgrade could threaten to bankrupt a whole country. This book examines the governance of credit rating agencies, as expressed by their ability to fairly, ethically and consistently assign higher rates to issuers having lesser default risks. However, factors such as the drive for increased revenue and market share, the inadequate business model, the inadequate methodology of assessing risk, opacity and inadequate internal monitoring have all been identified as critical governance failures for credit agencies. This book explores these issues, and proposes some potential solutions and improvements. This will be of interest to researchers and advanced students of corporate finance, finance, financial economics, risk management, investment management, and banking.
Author: Ahmed Naciri
Publisher: Routledge
ISBN: 1317634365
Category : Business & Economics
Languages : en
Pages : 253
Get Book Here
Book Description
Credit rating agencies play an essential role in the modern financial system and are relied on by creditors and investors on the market. In the recent financial crisis, their power and reliability were often questioned, yet a simple rating downgrade could threaten to bankrupt a whole country. This book examines the governance of credit rating agencies, as expressed by their ability to fairly, ethically and consistently assign higher rates to issuers having lesser default risks. However, factors such as the drive for increased revenue and market share, the inadequate business model, the inadequate methodology of assessing risk, opacity and inadequate internal monitoring have all been identified as critical governance failures for credit agencies. This book explores these issues, and proposes some potential solutions and improvements. This will be of interest to researchers and advanced students of corporate finance, finance, financial economics, risk management, investment management, and banking.
Author: Andrea Miglionico
Publisher:
ISBN: 9781786439932
Category : Credit bureaus
Languages : en
Pages : 0
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Book Description
The global crisis revealed that credit rating agencies (CRAs) are capable of bringing about potential distortions in the financial sector, thereby resulting in a reduction in market confidence which, in turn, influences negotiations and expectations. CRAs need to be held accountable for lack of transparency and inaccurate ratings, however the existing regulatory framework does not secure adequate investor protection. This book provides a new and important contribution to research in the area, at a crucial time in the debate around financial regulation and investment regimes.
Author: Andrea Miglionico
Publisher: Edward Elgar Publishing
ISBN: 1786439948
Category : LAW
Languages : en
Pages : 360
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Book Description
The global crisis revealed that credit rating agencies (CRAs) are capable of bringing about potential distortions in the financial sector, thereby resulting in a reduction in market confidence which, in turn, influences negotiations and expectations. CRAs need to be held accountable for lack of transparency and inaccurate ratings, however the existing regulatory framework does not secure adequate investor protection. This book provides a new and important contribution to research in the area, at a crucial time in the debate around financial regulation and investment regimes.
Author: A. Kruck
Publisher: Springer
ISBN: 0230307388
Category : Political Science
Languages : en
Pages : 221
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Book Description
Credit rating agencies play a powerful and contentious role in the governance of global financial markets. Introducing an original framework for delegating political authority to private actors, this book explains common trends in the regulatory use of private ratings for public purposes and analyzes regulatory changes after the Financial Crisis.
Author: Craig Lawrence Johnson
Publisher:
ISBN:
Category : Credit ratings
Languages : en
Pages : 82
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Book Description
Author: Frederick L. Bereskin
Publisher:
ISBN:
Category :
Languages : en
Pages : 51
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Book Description
We exploit the 1997 Asian financial crisis to show that credit rating concerns affect firms' corporate governance. We treat the crisis as an exogenous shock that led to improvements in the informativeness of Korea's credit rating system and find that credit rating concerns affect corporate governance following the crisis, but not before the crisis. Moreover, this effect is concentrated in firms that are in chaebol business groups, consistent with their increased dependence on external financing. Finally, we find that firms that were particularly affected by the reforms demonstrate an increased reliance on debt that is dependent on credit ratings, consistent with our hypothesized effects of this exogenous shock. Our paper presents a novel approach to evaluate whether managers would improve their firms' corporate governance in response to their credit rating concerns, and highlights the wide-ranging effects of reforms that are implemented due to financial crises.
Author: Giulia Mennillo
Publisher:
ISBN: 9781788211925
Category :
Languages : en
Pages : 240
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Book Description
This short book introduces and explores the complex world of the credit rating industry: how it works, how it has evolved, the role it played in the financial crisis, and how it is regulated. Giulia Mennillo shows, as constitutive actors of global financial capitalism, CRAs have a social and political relevance that reaches well beyond finance.
Author: Ahmed Naciri
Publisher: Routledge
ISBN: 1317192990
Category : Business & Economics
Languages : en
Pages : 177
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Book Description
The current degradation of sovereign balance sheets raises very real concerns about how sovereign creditworthiness is measured by credit rating agencies. Given the disastrous economic and social effects of any downgrade, the book offers an alternative and calls for more transparency about the quantitative measures used in calibrating the rating process and how sovereign ratings are validated. It argues that oversight is required and procedures improved, including subjecting methodologies of assessing default to more standardization and monitoring. Sovereign Credit Rating explains the process of sovereign creditworthiness assessment and explores the consequences of possible inaccuracies in the process. Developing an innovative new methodology to assess ratings accuracy, it shows that the announcement of each rating action by the major credit rating agencies show alarming inconsistencies. Written by an internationally recognized author and professor, this unique book will be of interest to researchers and advanced students in corporate governance, accounting, public finance and regulation.
Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 184
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Book Description
Author: Hollis Ashbaugh Skaife
Publisher:
ISBN:
Category :
Languages : en
Pages : 55
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Book Description
Using a framework for evaluating corporate governance recently developed by Standard amp; Poor's, this study investigates whether firms that exhibit strong governance benefit from higher credit ratings relative to firms with weaker governance. We document, after controlling for risk characteristics, that firm credit ratings are: (1) negatively associated with the number of blockholders that own at least a 5% ownership in the firm; (2) positively related to weaker shareholder rights in terms of takeover defenses; (3) positively related to the degree of financial transparency; and (4) positively related to over-all board independence, board stock ownership and board expertise, and negatively related to CEO power on the board. We also provide evidence that CEOs of firms with speculative grade credit ratings are overcompensated to a greater degree than their counterparts at firms with investment grade ratings, and that the overcompensation exceeds the CEO's share of additional debt costs related to lower credit ratings. Our study provides insights into the characteristics of governance that are likely to affect the cost of debt financing and provides one explanation for why some firms continue to operate with weaker governance when doing so may mean lower credit ratings.
