Investors and ratings agencies have been caught by surprise by the wave of recent bank failures and closures in Europe and Asia. This book addresses this issue by explaining why ratings exist, the history of ratings and the background of the ratings process. What are credit rating agencies? Many people paying for ratings andratings reports do not fully understand what they are buying andhow these agencies really work. Ratings agencies wield immensepower over the fate of individual corporations, countries, andwhole economies, yet their workings are remarkably opaque. Manyevents over the past decade, such as the Asian crisis and thedemise of certain financial institutions have highlighted some ofthe limitations of ratings agencies, and raised questions as totheir accountability and the level of service they provide.
In this comprehensive account of the workings of the ratingagencies,Andrew Fight explains the role played by ratings agencies,how ratings are obtained, the methodologies through whichorganisations are assessed and the wider consequences of thesedecisions.