Garcia Alcubilla and Ruiz del Pozo

in Credit Rating Agencies on the Watch List

Published in print March 2012 | ISBN: 9780199608867
Published online May 2012 | e-ISBN: 9780191739125 | DOI:

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The introductory chapter provides in non-technical language an overview of the history of ratings, the role of rating agencies in financial markets, and the characteristics of the rating industry. It also describes the multiple uses of ratings in markets, especially in regulation and in private contracts, focusing on the unintended consequences that rating triggers might have on issuers. Lastly, the chapter provides a step by step explanation of the process followed by the main agencies to produce a rating: sources of information, quantitative and qualitative elements factored into the credit analysis, interaction with the issuer, role of analysts and rating committees, notification to the issuer, appeals, and publication of ratings. It also explains how agencies perform the surveillance and monitoring of the outstanding ratings. The special features of the process for determining and monitoring structured finance ratings are analysed separately.

Keywords: rating agency; rating trigger; rating committee; analysts; monitoring; Standard & Poor’s (S&P); Moody’s; Fitch; rating shopping; structured finance instruments

Chapter.  11796 words. 

Subjects: Financial Markets

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