 A Template for a Public Credit Rating AgencySusan Schroeder Journal of Economic Issues, 2013, vol. 47, issue 2, 343-350 Abstract: In the wake of the global financial crisis (GFC), there have been calls for changes in the credit ratings industry. The American and European responses were new regulation and supervision of the rating agencies' activities and resolving issues on an "as-needed" basis. Are these efforts enough? Building on the discussion in M. Ahmed Diomande, James Heintz and Robert Pollin (2009), this paper puts forth a template for a public credit ratings agency. This agency's functions include the validation of the ratings of private rating agencies and the examination of the relationship between ratings changes and the business cycle. A public credit rating agency could be split into divisions, each of which focuses on particular types of borrowers: financial firms (banks and non-bank financial institutions), non-financial firms (corporations and SMEs) and households. These divisions could liaise with relevant agencies such as, for instance, the U.S. Securities and Exchange Commission. The paper concludes by arguing that national public credit rating agencies are not enough, and there needs to be an international credit rating agency, possibly housed at the United Nations, designed to validate sovereign ratings created by private agencies. Date: 2013 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:47:y:2013:i:2:p:343-350 Ordering information: This journal article can be ordered from DOI: 10.2753/JEI0021-3624470206 Access Statistics for this article More articles in Journal of Economic Issues from Taylor & Francis Journals |
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