Credit Rating Agencies: Junk Status?

UNCTAD | UNCTAD

Risk assessment is critical to well-functioning capital markets. Yet reliance on the “big three” credit rating agencies has increased with the rise of international capital flows. Their assessments have been strongly procyclical and have missed systemic risks. Insufficient competition, conflicts of interest and ideological bias are some of the reasons for this. The widespread use of their ratings has now come to be recognized as a potential threat to financial stability. Concerted reform of credit rating agencies is therefore urgently needed.

Categories:
Credit Ratings
Pages:
4
Year of publication:
31.12.2015
External Document: