What are credit rating agencies?

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11th Dec 2009 by Michael Haltman

Credit rating agencies, Moody's, S&P and Fitch, grade a financial product, company, government or governmental agency in terms of it's credit worthiness and ability to pay. These agencies recently were in the spotlight in a very negative way due to the fact that they has AAA ratings on products that were in fact extremely risky, and that ultimately went under. While these agencies have the ability to change a rating either up or down, they did not do this during the recent financial crisis. This led to many questions regarding the value of these ratings, as well as the conflict of interest because the people paying the fees for ratings were the same people being rated. Ratings that were not to the satisfaction of the issuer could lead to a loss of business.

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10th Dec 2009 In Mutual Funds 1 Answers | 544 Views

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