Changes of Credit Rating Quality and Regulatory Reforms for Credit Rating Agencies in the United States
| Autor: | Ying-Tai Ting, 丁英泰 |
|---|---|
| Rok vydání: | 2012 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 101 Credit rating quality has been under heavy public scrutiny especially due to the subprime mortgage crisis. Most commentators suggest the Credit Rating Agency Reform Act of 2006 and the related SEC regulations have limited impacts on improving credit rating quality and the poor rating quality also consequently triggered the subprime mortgage crisis starting the year 2007. This thesis provides empirical evidences to the above notions. Using a sample of credit ratings for U.S. default bond issues, I hypothesize and find that the general credit rating quality impairs after the enactment of the Act and related regulations (from September 26, 2006 to December 31, 2008) to compare with the period before the enactment (from July 25, 2002 to September 25, 2006). In addition, using financial sector firms as a proxy of structured finance products, I hypothesize and find that it is credit rating quality for debt issues of financial sector firms that deteriorates. This result also corresponds to the notion that credit rating agencies assigned inflated ratings to structured finance products and caused the misunderstanding of investors. Therefore, the financial crisis could be attributed to poor credit rating quality. Moreover, credit rating agencies and auditors, both serving as market gatekeepers, share lots of similarities. According to the empirical results and through a comparison with the regulatory framework for auditors, radical reforms focusing on the alternation of the business model for credit rating agencies must be taken so that the incentive problem and inherent conflicts of interest between the rating agencies and issuers could be cured. As a conclusion, I propose a modified issuer-pays model. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
| Externí odkaz: |
|