The regulation of credit rating agencies: A realistic view oa

There is a widespread agreement on the proposition that the performance of the credit rating agencies has not been that great and that their ratings and downgrades played pivotal roles in the global financial crisis and the European sovereign debt crisis. Yet most of the regulatory proposals to deal with them are no more than tweaks around the edges because of the belief that it is difficult to disentangle the regulatory process from the views of the rating agencies in a framework that was put in place in the 1930s. In this paper it is argued that taking the rating agencies out of the regulatory framework is not as problematic as it is portrayed to be and that the task should not carried out without other fundamental regulatory changes. © 2016 Macmillan Publishers Ltd.