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Credit: Rating Agencies

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Encyclopedia of Law and Economics

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Abstract

Credit rating agencies (CRAs) are pivotal players in financial markets, and in fact their conduct has attracted the attention of scholars, media, and policy analysts. A very common claim is that CRA behavior contributed to the explosion and the propagation of the recent financial crisis. This entry sketches the functioning of the market for ratings and explores the market failures by which it is characterized. Moreover, this entry briefly presents some of the proposals advanced by the law and economics literature to induce CRAs to issue accurate ratings.

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Author information

Authors and Affiliations

  1. China-EU School of Law, China University of Political Science and Law, Beijing, China

    Alessandro Romano

Authors
  1. Alessandro Romano
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Corresponding author

Correspondence to Alessandro Romano .

Editor information

Editors and Affiliations

  1. MRE and University of Montpellier, Montpellier, France

    Alain Marciano

  2. Faculté d’Economie, Université de Montpellier and LAMETA-UMR CNRS, Montpellier, France

    Alain Marciano

  3. DiGSPES, University of Eastern Piedmont, Alessandria, Italy

    Giovanni Battista Ramello

  4. IEL, Torino, Italy

    Giovanni Battista Ramello

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Romano, A. (2019). Credit: Rating Agencies. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_667

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