Rating agencies and sovereign credit risk assessment
Nicolas Veron and
Policy Contributions from Bruegel
Credit rating agencies (CRAs) have not consistently met the expectations placed on them by investors and policymakers. It is difficult, however, to improve the quality of ratings through regulatory initiatives. In the short term, changes to the CRAs’ regulatory environment, in a context of high market uncertainty, may add to market stress. The role of credit ratings in regulation should be reduced but eliminating it entirely would have significant downsides, at least in the short term. The transfer of ratings responsibility to public authorities, including the European Central Bank, is unlikely to be a good alternative because of inherent conflicts of interest. The notion of risk-free sovereign bonds is challenged by the crisis, but the most straightforward way to address this challenge in the euro-area context would be the establishment of a euro-area-wide sovereign bond instrument. This Policy Contribution was prepared as a briefing paper for the European Parliament's Economic and Monetary Affairs Committee’s Monetary Dialogue
New Economics Papers: this item is included in nep-eec
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bre:polcon:658
Access Statistics for this paper
More papers in Policy Contributions from Bruegel Contact information at EDIRC.
Bibliographic data for series maintained by Bruegel ().