Rating Agencies were independently owned entities who added value by objective financial assessment of companies which they translated into Rating Symbols.
In the early 90's the Rating Agencies could not be independent anymore, they became attached to larger entities and their ability to see clearly diminished.
Slowly their looking glass became opaque and their contribution to the financial world became more like a Mad Hatters Party and gradually they lost their credibility.
For want of any other alternative Rating Agencies continued to be used, like using a one eyed guide in a blind country. But today the truth is out and Rating Agencies have become an outcast in the world of finance.
Here are five actions which may arrest the decline of Financial Rating Agencies:
1. Disperse the shareholders of rating agencies and restore its independence.
2. The regulator must review rating methodology used by the Rating Agency.
3. Rating committe meetings will be recorded on camera.
4. Punitive action for insider trading and biased rating.
5. Regulator to appoint experienced professionals to the Board and rating committees.
Sunset of Financial Rating Agencies is Imminent if they do not set their house in order on their own or with the help of the Regulator.
It will be a sad day when the Financial World discards the rating agencies who once contributed to the advent of secure and stable markets.
Will the Rating Agencies weather the Storm and come out Clean?
In the early 90's the Rating Agencies could not be independent anymore, they became attached to larger entities and their ability to see clearly diminished.
Slowly their looking glass became opaque and their contribution to the financial world became more like a Mad Hatters Party and gradually they lost their credibility.
For want of any other alternative Rating Agencies continued to be used, like using a one eyed guide in a blind country. But today the truth is out and Rating Agencies have become an outcast in the world of finance.
 |
| Sunset at Mumbai |
Here are five actions which may arrest the decline of Financial Rating Agencies:
1. Disperse the shareholders of rating agencies and restore its independence.
2. The regulator must review rating methodology used by the Rating Agency.
3. Rating committe meetings will be recorded on camera.
4. Punitive action for insider trading and biased rating.
5. Regulator to appoint experienced professionals to the Board and rating committees.
Sunset of Financial Rating Agencies is Imminent if they do not set their house in order on their own or with the help of the Regulator.
It will be a sad day when the Financial World discards the rating agencies who once contributed to the advent of secure and stable markets.
Will the Rating Agencies weather the Storm and come out Clean?
