Credit Rating Agencies


Also found in: Acronyms.

Credit Rating Agencies

Firms that compile information on and issue public credit ratings for a large number of companies.

Credit Rating Agency

A company that provides investors with assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. A high rating indicates low risk and may therefore encourage investors to buy a security. Additionally, banks may only invest in securities with a high rating from two or more credit rating agencies. The SEC recognizes 10 firms as credit rating agencies; Fitch, S&P, and Moody's are the three most prominent. However, the methods of credit ratings agencies have been subject to criticism. For example, most agencies gave high-risk mortgage-backed securities top ratings until they defaulted at the collapse of the housing bubble.
References in periodicals archive ?
In July 2015, a law regulating the activity of credit rating agencies was passed.
A source at ACRA, who declined to be identified because he was not allowed to speak publicly, said international credit rating agencies have no interest in issuing local Russian ratings because there's no profit in it.
Credit rating agencies are major players in today's financial markets.
The financial market authority is considering broad ways to develop the bond market and other instruments and to allow credit rating agencies to play an important role by improving the level of transparency between issuers of securities and instruments that need to finance and investors interested in this type of securities," he said.
Now even the credit rating agencies are beginning to lose faith in the Chancellor.
The ECB said that if bond issuers are allowed to switch credit rating agencies, ratings agencies could issue false ratings in order to gain more business.
He adds: "A lot of companies tend to only engage with credit rating agencies a month before their ratings come up for their annual review and are then surprised when they might not receive the rating they were hoping for.
The report notes that despite changes by some of the examined credit rating agencies to improve their operations, Commission staff identified concerns at each of the NRSROs.
The big credit rating agencies can determine a country's fate, by deciding whether they're creditworthy or not.
KARACHI, April 11, 2010 (Balochistan Times): State Bank of Pakistan has renewed status of External Credit Assessment Institutions (ECAIs) of both the credit rating agencies operating in Pakistan namely JCR-VIS Credit Rating Company Limited and The Pakistan Credit Rating Agency Limited for the calendar year 2010.
KARACHI, April 10, 2010 (Frontier Star): The State Bank of Pakistan has renewed the Status of External Credit Assessment Institutions (ECAIs) of both the credit rating agencies operating in Pakistan namely JCR-VIS Credit Rating Company Limited and The Pakistan Credit Rating Agency Limited for the calendar year 2010.
Mr Hughes says that: "One of the world''s biggest and most trusted credit rating agencies puts the UK on a par with Chile because of the government''s failure to put in place proper safeguards after the credit crisis.