Credit rating agencies – Credibility at stake
08 June 2015
Credit rating agencies (CRAs) are considered the gatekeepers to the financial markets. They are an integral part of the capital markets, providing assessment of default and loss probabilities on a variety of fixed-income instruments worldwide. While their processes are unique, their ratings reflect their reviews and analyses of everything from sovereign debt and public finance debt issues to traditional corporate bonds, asset-backed securities, and a host of structured instruments. Nerina Visser, Board Member of the South African Society of the Chartered Financial Analyst Institute (CFA) says, despite being around since the 1860s, these agencies have come under increasing attack in the past few years by investors, regulators, and the business community. In her opinion she discusses the regulations and the credibility of CRAs.