TITLE

CREDIT AND CREDIBILITY: TRIPLE-A FAILURE AND THE SUBPRIME MORTGAGE CRISIS

AUTHOR(S)
Wagué, Cheick
PUB. DATE
September 2011
SOURCE
Review of Business Research;2011, Vol. 11 Issue 4, p1
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The recent turmoil in the international financial markets following the subprime mortgage crisis in the US 2007-08 has raised questions about the role of credit rating agencies in this crisis. One of the enduring questions of the financial crisis is how the credit ratings establishment got so much so wrong for so very long. How could century -- old institutions like Standard and Poor's, Fitch and Moody's Investors Service give their triple -- A blessings to subprime junk? This paper examines the three major credit rating agencies, their rating methods, business model and several related public policy concerns. The paper argues that the failure of the credit rating agencies to provide accurate ratings may indeed be a structural problem -- inefficiencies are hence not solely due to investor naivety.
ACCESSION #
69988904

 

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