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Credit: Rating Agencies

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Encyclopedia of Law and Economics

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Definition

Credit rating agencies (CRAs) provide investors and regulators, as well as other stakeholders, with certifications of the quality of financial assets. As such, they are pivotal players in financial markets. Their conduct has accordingly attracted the attention of scholars, media, and policy analysts. This entry sketches the functioning of the ratings market and explores its failures. Additionally, it presents some of the proposals advanced by the law and economics literature to induce CRAs to issue accurate ratings and hints at the discussion concerning the effects of the latest US regulatory developments on the ratings market.

Introduction

Credit rating agencies (CRAs) are fundamental players in financial markets (White 2019). The main activity of CRAs is providing investors and regulators, as well as other stakeholders, with certifications of the quality of financial assets. Any lender is interested in knowing the likelihood that the borrower will honor his debt, and...

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Acknowledgments

Casimiro A Nigro thankfully acknowledges funding and logistic support by the Deutsche Forschungsgemeinschaft – DFG (Project ‘FOR 2774’).

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Authors and Affiliations

  1. DFG Center for Advanced Studies – Foundations of Law & Finance, Goethe University, Frankfurt, Germany

    Casimiro A. Nigro

  2. Department of Law, Bocconi University, Milan, Italy

    Alessandro Romano

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  1. Casimiro A. Nigro
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  2. Alessandro Romano
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Correspondence to Alessandro Romano .

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Editors and Affiliations

  1. Montpellier, France

    Alain Marciano

  2. Dept DiGSPES, Univ del Piemonte Orientale Dept DiGSPES, Alessandria, Italy

    Giovanni Battista Ramello

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Nigro, C.A., Romano, A. (2022). Credit: Rating Agencies. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_667-2

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  • DOI: https://doi.org/10.1007/978-1-4614-7883-6_667-2

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  • Print ISBN: 978-1-4614-7883-6

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Chapter history

  1. Latest

    Credit: Rating Agencies
    Published:
    26 November 2021

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_667-2

  2. Original

    Credit (Rating Agencies)
    Published:
    22 February 2017

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_667-1

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