Bernhard Bartels, Beatrice Weder di Mauro, 04 July 2013

US-based credit-rating agencies are regularly subject to condemnation for causing or amplifying financial crises – the Eurozone Crisis in particular. Should Europe try to set up a European agency to counter this? This column discusses evidence that shows that the largest German rating agency was more aggressive than the US Big Three both in terms of a lower level and a higher propensity to quickly downgrade Eurozone problem countries.

Otaviano Canuto, Sanket Mohapatra, Dilip Ratha, 03 September 2011

Sovereign ratings are important for countries to access international capital, but even today 58 developing countries are not rated by Standard and Poor’s, Moody’s, or Fitch. This column presents an exercise to predict “shadow” sovereign ratings for these unrated countries. Contrary to popular perception, the unrated countries are not all at the bottom of the rating spectrum.

Helmut Reisen, 19 May 2010

Credit rating agencies have recently downgraded Greek, Portuguese, and Spanish sovereign debt, causing unrest among Europe’s leaders. This column argues that unless sovereign ratings can be turned into proper early warning systems, they will continue to increase instability and volatility and to undermine the benefits of capital markets. One option is to drop the use of sovereign ratings in prudential regulation altogether.

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