This paper intend to analyze the characteristics of the business model of the rating agencies in the world focusing on their role in the financial market and their responsibilities in the financial scandals that have affected economic systems. The analysis focuses on the three major international rating agencies such as precisely as Fitch, Moody 's and Standard&Poor's, taking care to represent their historical development and business models used as well as economic relations and corporate. The analysis of these elements has highlighted conflicts of interest exist and the presence of information asymmetries that affect the proper functioning of the market. Considering the context in which rating agencies operate and the power they wield in determining the returns on financial assets and expectations we wanted to examine the role that these agencies have in the international economic and financial system emphasizing some of the critical issues in their business model. The analysis finally allows to highlight the causal link between the economic and financial crisis in the economies of most developed countries and the rating systems used. Finally, this document is to highlight the importance of the rating system as a means of assessing the dynamics of the global financial and economic market but, given its importance and recent experiences, also the need for policies and regulatory instruments both models business methods of application of the ratings as unbiased as possible.

The Business Model of Rating Agencies between Asymmetric Information and Financial Crises

SABATINO, MICHELE
2014

Abstract

This paper intend to analyze the characteristics of the business model of the rating agencies in the world focusing on their role in the financial market and their responsibilities in the financial scandals that have affected economic systems. The analysis focuses on the three major international rating agencies such as precisely as Fitch, Moody 's and Standard&Poor's, taking care to represent their historical development and business models used as well as economic relations and corporate. The analysis of these elements has highlighted conflicts of interest exist and the presence of information asymmetries that affect the proper functioning of the market. Considering the context in which rating agencies operate and the power they wield in determining the returns on financial assets and expectations we wanted to examine the role that these agencies have in the international economic and financial system emphasizing some of the critical issues in their business model. The analysis finally allows to highlight the causal link between the economic and financial crisis in the economies of most developed countries and the rating systems used. Finally, this document is to highlight the importance of the rating system as a means of assessing the dynamics of the global financial and economic market but, given its importance and recent experiences, also the need for policies and regulatory instruments both models business methods of application of the ratings as unbiased as possible.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11387/111981
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