ISSN: (Online) 2321 -4155
ISSN: (Print) 2320 -7000

JOURNAL OF INDIAN RESEARCH (ISSN No. : 2320-7000)
VOLUME : 1, ISSUE : 4,October-December, 2013
 
A TALE OF TRANSITION – EVOLUTION OF CREDIT RATING AGENCY INDUSTRY AMIDST A DECADE OF CRISIS
Dhruv Priyadarshi Nijhawan & Stuti Priyadarshni Nijhawan
 
ABSTRACT
During the last decade, the global financial regulators have witnessed some large multinational organizations collapse and onset of massive bankruptcy. The major failure of giants like Enron, Lehman Brothers and AIG, to name a few, was never anticipated before it struck unceremoniously. The aftermath of Credit Crisis in 2008 and Subprime lending turmoil in 2009-10, witnessed the evolution of rating agencies from a mere egg shell of allocating credit ratings to policy consulting agendas. More recently, the rating agency Standard & Poor stunned the world by stripping the U.S. government of its prized AAA bond rating. The downgrade of long-term U.S. Treasury threatened to spread panic and chaos in financial markets. This drove up U.S. interest rates, pushing the dollar down, scaring investors away from stocks and into that traditional refuge for the investor: gold. The purpose of this research paper is to understand the evolution of credit rating industry amidst changing regulatory cycle of reforms in the last decade with reference to some major caselets including both developing and developed nations.
 
KEYWORD
American Tax-Payer Relief Act, Credit Rating Agency Industry, Dodd-Frank Act, Subprime Lending.
 
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