Credit-rating agencies are back under the spotlight
This time is different from the financial crisis—sort of
IN TIMES OF financial plenty credit ratings go largely unnoticed. In downturns, though, they attract more scrutiny—and are often found wanting. The dotcom crash of 2000-01 exposed ratings of some erstwhile corporate stars, including Enron, as nonsense. Worse was to come in the financial crisis of 2007-09, which the three big rating agencies—Moody’s, S&P and Fitch—helped cause by trading reputation for profit and giving implausibly high marks to securitised mortgages. An official report on the crisis branded the agencies “essential cogs in the wheel of financial destruction”.
This article appeared in the Finance & economics section of the print edition under the headline “Markers marked”
Finance & economics May 9th 2020
- Credit-rating agencies are back under the spotlight
- With oil prices depressed, China presides over a buyer’s market
- A perky stockmarket v a glum economy
- Emerging markets launch QE, too
- In bleak times for banks, India's digital-payments system wins praise
- Could the pandemic give America’s labour movement a boost?
- Losses by central banks are nothing to fear
From the May 9th 2020 edition
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