Standards are Poor: On Competence and Professional Integrity at the Leading Rating Agency
Series
Economics Working Paper Series
Type
discussion paper
Date Issued
2014-07-15
Author(s)
Abstract
Competence behind the rating of sovereign countries is crucial, given that the market for government bonds may be vulnerable to multiple equilibria and self-fulfilling prophecies. With this in mind, this paper reviews and scrutinizes an official Standard and Poor's (S&P) publication that addresses key issues surrounding the market for government bonds and the role of sovereign ratings. It encounters: a low level of competence, revealed in an inability to engage in logical discourse and an inadequate grasp of crucial concepts such as multiple equilibria and self-fulfilling prophecy; obliviousness to S&P's own rating methodology; and a nonchalant treatment of facts that casts a poor light on its professional integrity.
[http://ideas.repec.org/p/usg/econwp/201418.html Volltext herunterladen]
[http://ideas.repec.org/p/usg/econwp/201418.html Volltext herunterladen]
Language
English
Keywords
Credit rating agencies
competence
integrity
sovereign debt ratings
Standard and Poor's; Ratingagenturen
Kompetenz
Integrität
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
No
Publisher
School of Economics and Political Science
Publisher place
St. Gallen
Number
2014-18
Start page
24
Subject(s)
Division(s)
Eprints ID
233496