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Corporate Governance Series-Part 2: Credit Rating Agency by-Gaurav Bansal

  • Category
    Economy
  • Published
    13th Dec, 2018

A credit rating agency (CRA) is a company that rates debtors on the basis of their ability to pay back their interests and loan amount on time and the probability of them defaulting. These agencies may also analyze the creditworthiness of debt issuers and provide credit ratings to only organizations and not individuals consumers.

Issue

A credit rating agency (CRA) is a company that rates debtors on the basis of their ability to pay back their interests and loan amount on time and the probability of them defaulting. These agencies may also analyze the creditworthiness of debt issuers and provide credit ratings to only organizations and not individuals consumers.

The credit rating industry has a history of 158 years, but it is currently dominated by three major rating agencies controlled by US capital: Standard & Poor's, Moody's and Fitch Ratings, also known as THE BIG THREE. The three companies share about 90 percent of the global market.

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