2022, Vol. 3, Issue 1, Part C
A study of international political economy of credit rating agencies
Author(s): Payal Sugandh
Abstract: A credit rating is an opinion of a particular credit agency regarding the ability and willingness an entity (government, business, or individual) to fulfill its financial obligations in completeness and within the established due dates. A credit rating also signifies the likelihood a debtor will default. It is also representative of the credit risk carried by a debt instrument – whether a loan or a bond issuance. Credit Rating Agencies have recently come under scanner for their lack of independence, ambiguity in functioning and mechanisms in credit rating processes, their misses in financial crises like the Global Financial Crisis (2008) and associated Euro-zone crisis. Its excessive tilt towards developed countries in terms of ownership is also questioned as seen in the ongoing discourse on setting up a separate BRICS Credit Rating Agency during the 2015 BRICS Summit held in Ufa., Russia. It can be inferred that, against the backdrop of the financial status of the states, what we need to cautiously examine is the tools and methods that ultimately determine the ratings of state government, the public sector and other statutory corporations.
Pages: 115-117 | Views: 212 | Downloads: 85
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How to cite this article:
Payal Sugandh. A study of international political economy of credit rating agencies. Asian J Manage Commerce 2022;3(1):115-117.