The Role of the Credit Rating Agencies in the U.S. Subprime Crisis : Too Much Competition ?
menghu.substack.com
A known fact is that the Big Three, namely, Moody’s, Fitch Ratings, Standard & Poor’s, have provided inaccurate ratings that were obviously too generous. These CRAs (not to be confounded with Community Reinvestment Act), contamined by conflicts of interest, had played a role in the subprime crisis. But not only their role in the crisis is exaggerated, the causes as for their deficiencies seem to be attributed to poor regulation rather than by regulation itself. The common, but erroneous view is the suggestion that financial markets need more, better regulation, while in fact it may be the regulation itself that had caused these deficiencies.
The Role of the Credit Rating Agencies in the U.S. Subprime Crisis : Too Much Competition ?
The Role of the Credit Rating Agencies in the…
The Role of the Credit Rating Agencies in the U.S. Subprime Crisis : Too Much Competition ?
A known fact is that the Big Three, namely, Moody’s, Fitch Ratings, Standard & Poor’s, have provided inaccurate ratings that were obviously too generous. These CRAs (not to be confounded with Community Reinvestment Act), contamined by conflicts of interest, had played a role in the subprime crisis. But not only their role in the crisis is exaggerated, the causes as for their deficiencies seem to be attributed to poor regulation rather than by regulation itself. The common, but erroneous view is the suggestion that financial markets need more, better regulation, while in fact it may be the regulation itself that had caused these deficiencies.