Regulating Credit Rating Agencies (Elgar Financial Law series)

This highly topical book examines how the leading credit rating agencies - Moody's, Standard & Poor's and Fitch - have risen to prominence in the wake of the financial crisis.

It investigates how the Big Three have become ever more profitable even though the quality of their ratings has declined and rating scandals have tarnished their reputation. After a century of being left quasi-unregulated the rating industry is now subject to sweeping reforms. This informative study analyzes the post-crisis overhaul in the United States and the European Union. The focus lies on the interactions between regulatory intervention and competitive incentives among the Big Three. This book highlights the challenges faced by policymakers trying to regulate the rating industry and simultaneously decrease over-reliance on ratings.

Regulating Credit Rating Agencies will appeal to academics in law and economics, practitioners, policymakers, lawmakers and regulators.

Contents:
Foreword
Part I: Prelude to the Credit Rating Industry
1. Introduction
2. History of Credit Rating Agencies
3. Description of the Credit Rating Industry
Part II: Regulatory Structure
4. Rating-based Regulations
5. Regulatory Treatment of Credit Rating Agencies
6. Regulatory Trends
Part III: Uses and Abuses of Credit Ratings in Structured Finance
7. Growth of the Structured Finance Segment
8. Wrong Incentives in the Credit Rating Industry
9. Regulatory Response to the Problems of Structured Finance Ratings
Part IV: System-wide Effects of Credit Rating Downgrades
10. System-relevance of Credit Ratings
11. Market Reactions to Credit Rating Downgrades and their Consequences
12. Regulatory Response to the Systemic Issue
Part V: Trends and Outlook
13. Restoring Competition in the Credit Rating Industry
14. Concluding Remarks
Bibliography
Index

Aline Darbellay, Assistant Professor of Corporate and Capital Markets Law, University of Zurich, Switzerland