Nobody downloaded yet

Ethics behind Credit Rating Agencies business and the role of regulator issues - Assignment Example

Comments (0) Cite this document
Summary
The companies are generally rated on the basis of their performances. There are various credit rating agencies that are assigned with the responsibility of rating the companies all over the…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.6% of users find it useful
Ethics behind Credit Rating Agencies business and the role of regulator issues
Read TextPreview

Extract of sample
"Ethics behind Credit Rating Agencies business and the role of regulator issues"

Download file to see previous pages The credit rating agencies plays an important role in assessing the credit worthiness of the company. Creditworthiness is considered as a parameter in evaluating the willingness and the capacity of the debtor to repay the debt. There are various credit rating agencies in the world. Among the various credit agencies, the three most popular and well known credit rating agencies are Standard and Poor, Fitch group and Moody’s. Each credit rating agencies has its own rating scale for ranking and rating the companies across the world (Bahena, 2010).
The Credit rating agencies played an important role in influencing and facilitating the investors to invest in the international securities. The credit rating agencies have devoted themselves in designing the structure of the agencies. The Credit rating agencies were assigned with responsibilities during the period of financial crisis prevailing in the economy. But it has been observed that the agencies were unregulated before the financial crisis. After the financial crisis the government has imposed restriction and emphasized on maintaining transparency in its rating procedures for the growth and development of the agencies.
The credit rating agencies faced criticism during the period of financial crisis, since it failed to publish verifiable and valid data about the rating performance of the companies. The criticisms encountered by the rating agencies were mainly due to the following reasons such as the underestimation of the correlation due to the default during the economic downturn, the lack of sufficient data, overreliance on the statistical and mathematical methodologies by the credit rating agencies has resulted in furnishing of inadequate data and the disregard of various conflicting interest. The credit rating agencies receives revenue from the issuers of the companies. Suppose a company is rated high by one credit rating agency as compared to other credit agency then the company will prefer to rate ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Ethics behind Credit Rating Agencies business and the role of Assignment”, n.d.)
Ethics behind Credit Rating Agencies business and the role of Assignment. Retrieved from https://studentshare.org/finance-accounting/1695683-ethics-behind-credit-rating-agencies-business-and-the-role-of-regulator-issues
(Ethics Behind Credit Rating Agencies Business and the Role of Assignment)
Ethics Behind Credit Rating Agencies Business and the Role of Assignment. https://studentshare.org/finance-accounting/1695683-ethics-behind-credit-rating-agencies-business-and-the-role-of-regulator-issues.
“Ethics Behind Credit Rating Agencies Business and the Role of Assignment”, n.d. https://studentshare.org/finance-accounting/1695683-ethics-behind-credit-rating-agencies-business-and-the-role-of-regulator-issues.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Business Ethics: Workplace Privacy Issues
...? Business Ethics: Workplace Privacy Issues Table of Contents Introduction....................................................................................................................3 2 The Nature of Privacy....................................................................................................4 3 Problems of Organizational Influence over Private Lives.............................................5 4 Moral Issues raised by the use of Polygraphs and Personality Tests.............................7 5 Employee Monitoring and Drug Testing.......................................................................8 6 Working conditions... ...
10 Pages(2500 words)Essay
Did Credit Rating Agencies do good work (with impact on the Qatari Context)
...? Did Credit Rating Agencies Do Good Work The agencies bear the greatest responsibility of the financial crisisthat last from 2007 to 2009 and the policy makers, agencies itself and the market participants acknowledge the CRAs. The fact remains that the CRAs will not be able to satisfy the policy makers in removing the flaws in the rating methods. From the research, the CRAs were not able to improve the corporate governance. The research will try and point out on the role and benefit of credit rating agencies which are private companies with one aim of assess the rate the issue of debt to individual, company and even the government. The research will analyze the roles and benefit of CRAs in the last financial crisis of 2007 – 2009... ...
12 Pages(3000 words)Term Paper
Did Credit Rating Agencies do good work
...? Credibility of Credit Rating Agencies of the of the This research paper includes an in depth study ofvarious inter related topics which gives a good understanding of the globally connected financial industry. It explains various aspects of the financial industry and their resulting consequences. To start with, the role of the credit rating agencies in the 2007-08 global financial crises has been discussed in details. This part explained how the rating system of these agencies was influenced by hefty incentives and how that triggered the 2007-08 financial crises. This part of the study...
14 Pages(3500 words)Research Paper
Did Credit Rating Agencies do good work
...from secondary sources considering the importance of statistical data for reaching a conclusion. A proper analysis and evaluation is done to understand the findings of the study and indicate the key factors underlying the report. Introduction-Background The essential role of the Credit Rating Agencies have been particularly highlighted during the period of global economic crisis in 2008 which affected even the strongest economies in the world. The Credit Rating Agencies essentially served the main purposes of mitigating the asymmetrical information system existing in the markets between the investors and the...
10 Pages(2500 words)Essay
Composite Role Rating
...Composite Role Rating The faculty evaluation process is routinely adopted by universities for evaluating performance and improving the teaching effectiveness of its faculty members. A successful evaluation system commonly involves obtaining valid and reliable inputs from students, peers and department chair. However, according to Arreola (2007), the evaluation process is necessarily subjective but, for consistency of conclusions, it needs to be made objective through the strategy of controlled subjectivity. The evaluation procedure essentially consists of a numerical rating provided by the sources in several pre-defined areas (roles and components) of teacher...
2 Pages(500 words)Essay
Business ethics issues in WorldCom
...success and because of this they started doing unethical activities at the company. It was because of the negative role of the senior executives that unethical practices flourished at WorldCom as they created such an organization culture which did not question anyone in the firm. Hence it can be said that fraudulent activities even at the lower designations was taking place at a higher rate. Hence it can be clearly identified here that inefficiency of the leader at WorldCom caused more of these ethical issues to arise (Kotter & Heskett 1992). The Company did not properly follow the accounting standards, while preparing the accounts to show that the profits were...
7 Pages(1750 words)Essay
Credit Assessment and Consulting in Rating Agencies
...on the manner to structure their debt issues with the aim of securing a favorable rating (Crockett, Harris, Mishkin & White, 2004). In such circumstances, the credit-rating agencies are in effect auditing their own work. Moreover, credit-rating agencies may deliver favorable ratings so as acquire extra clients for the ancillary consulting business. The Implications of Conflict of Interest on the Stakeholder’s Benefits Much of the challenges associated with Credit Assessment and Consulting in Rating Agencies relate to the...
2 Pages(500 words)Research Paper
Credit rating of small business
...Credit rating of small business Affiliation This paper evaluates whether a bank should or should not grant a loanto a small business based on the credit rating. Specifically, it assesses if the bank should grant the loan to the small business if it has a bad credit rating. Evidence has been derived from peer reviewed scholarly articles in order to support the justifications. Profits are fundamental to any bank setting. Therefore, when a bank is evaluating whether to grant a loan or not, it assesses the risk associated with granting that loan. According to Stein (2004), banks frequently...
2 Pages(500 words)Research Paper
Credit rating agencies should be regulated more strictly to prevent conflict of interest, but also should allow more new credit agencies to have more objective opinions
...is that the institute evaluates credibility of the agencies based on accuracy of their rates and if some agencies issued too inaccurate rates, the institute downgrades the credibility of the agencies. Evaluating these agencies make investors able to look up which agencies are reliable and can obtain credible information from those agencies. The other problem of this credit rating industry is lack of competitions. According to Economist, “All told, the ratings agenciesbusiness “has not been threatened...
7 Pages(1750 words)Essay
"Financing, Valuation, and Rating Agencies"
...Sources of Finance for a Convenience Store al Affiliation Sources of Finance for a Convenience Store. A convenience store is a shop located at strategic locations selling fast moving products such as tobacco, snacks, and magazines. The stores are usually run by an attendant and are at the epicenter of an extremely active society. The most preferred site is at a junction of busy commercial streets or industrial packs to serve workers. Other utilities may include a coffee shop and a gas station that are among the top priorities of a working people. Fast moving products translate to mobile cash and, therefore, a good profit making business. Equity Financing is one way to get capital to start up a convenience...
1 Pages(250 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Assignment on topic Ethics behind Credit Rating Agencies business and the role of regulator issues for FREE!
Contact Us