Credit Rating Agencies


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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 ?
"Then the credit rating agencies will have no choice but to notice these achievements, give credit to these efforts and further elevate our credit ratings."
However, economists reveal that the ratings given by credit rating agencies aren't the one-way lens, downgrades are not due to domestic politics alone.
The credit rating agencies positively evaluated such efforts for growth potential on top of recognizing the country's solid growth, according to the finance ministry.
This coincided with regional and international criticism of these global credit rating agencies. That is due to their high volatile ratings that are largely built on general market sentiment, which does not reflect the real economic situation of any country.
International credit rating agencies cite the new legislation as a reason for cutting back their Russian operations.
Saudi Arabia's capital market regulator will introduce rules for credit rating agencies next September, part of reforms aimed at modernising the financial sector of the world's top oil exporter.
Credit rating agencies should meet a certain number of conditions to be registered in the EU (Regulation 462/2013 and Directive 2013/14/EU).
As 2013 drew to a close, the SEC issued its annual report to Congress on credit rating agencies (called nationally recognized statistical rating organizations, or NRSROs).
Credit rating agencies (CRAs) will have to follow stricter rules as of Thursday, June 20, following relevant legislation that enters into force after the agreement of the Council and the European Parliament.
| BRUSSELS, June 18 (KUNA) -- The European Commisison Tuesday announced that as of Thursday, 20 June, credit rating agencies will have to follow stricter rules which will make them more accountable for their actions.
Credit rating agencies have a major role in narrowing the information gap between investors and lenders in relation to the level of credit eligibility for countries, companies and financial instruments.
The palace statement added that the Philippines has finally received the much-coveted investment grade status from Fitch Group, one of the three major international credit rating agencies that assesses the government's ability to pay back its debt and the chance of non-payment.