Credit rating agencies are controversial yet influential financial gatekeepers. Many have attributed the recent failures of credit rating agencies to conflicts of interest, such as the agencies’ issuer-pays business model and the agencies’ provision of ancillary services. This report identifies these conflicts; examines recently-finalized Security and Exchange Commission (SEC) regulations proscribing these conflicts; and suggests other possible regulatory measures. The strategies available to regulators are diverse and differ widely in their political and administrative feasibility. These strategies include outright prohibition of conflicts; removing regulatory references to credit ratings; enhancing agency liability; organizational firewalls; performance disclosures; demonstrating due diligence and its results; increasing competition; staleness reforms; internal governance; administrative registration; and requiring alternative business models. While the report primarily focuses on how the most recent financial crisis—and the related market for asset-backed securities—highlighted conflicts of interest at credit rating agencies, this report also examines how credit ratings—and their limitations—affect sovereign debt markets. / text
| Identifer | oai:union.ndltd.org:UTEXAS/oai:repositories.lib.utexas.edu:2152/ETD-UT-2012-05-5115 |
| Date | 21 August 2012 |
| Creators | Crumley, Diana G. |
| Source Sets | University of Texas |
| Language | English |
| Detected Language | English |
| Type | thesis |
| Format | application/pdf |
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