The new regulation of rating agencies and its influence on financial markets

Authors

  • Горан Радивојац Faculty of Economics, University of Banja Luka

Keywords:

rating agencies, rating, credit rating, rating agencies regulations, eurozone crisis

Abstract

The crisis in global financial markets, in the last year, has evolved into a crisis of the euro zone. In the countries of the European Union, especially in political discussions of “Euro-politicians” rating agencies are marked as the main culprit for the new situation . This paper discusses the historical development and the role of rating agencies, the rating elements and their business practices. Recognizing the fact that rating agencies now play a dominant role in directing capital ?ows at the global level, in the text that follows the author presents the current events in financial markets. The conclusions are a synthesis of theoretical views of di?erent authors on the topic and the information available to the public whose interpretation the author presents based on his so far acquired knowledge and experience in this field.

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References

Atkinson, R. (2006).Managing Director, Global Capital Markets, Morgan Stanley, DPWN: Te initial credit rating of a major corporation, January 13, 1 – 20, p. 8.

Bolger, R.M., Managing Director, Global Regulatory Affairs & Associate General Counsel – Standard & Poor’s. (2005). The credit rating agency duopoly relief act of 2005, Testimony before the House Subcommittee on Capital Markets. Insurance and Government Sponsored Enterprises, June 29, pp. 1 – 17, Exhibit A.

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Maas A., D. (2011). Policing the ratings agencies: the case for stronger criminal disincentwes in the credit rating market. Journal of Criminal Law & Criminology, Vol. 101, Issue 3, pp. 1005-1038.

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Mulligan, M. C. (2009). From AAA To F: How the credit rating agencies failed America and what can be done to protect investors. Boston College Law Review; Nov2009, Vol. 50, Issue 5, pp. 1275-1305.

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http://ec.europa.eu/internal_market/securities/cesr

http://www.iosco.org/

http://www.sec.gov

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Published

2012-02-29

How to Cite

Радивојац, Г. (2012). The new regulation of rating agencies and its influence on financial markets. Acta Economica, 10(16), 155–171. Retrieved from http://ae.ef.unibl.org/index.php/AE/article/view/139

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Section

Review article