Why regulation isn't enough to curb bad behaviour of credit rating agencies

International credit rating agencies have had their fair share of controversies over the years. They have been at the centre of the major financial crises from the financial markets collapse of New York City in the mid-1970s, the Asian financial crisis of 1997 – 1998, the Enron scandal of 2001, to the global financial crisis of 2008. All of these cost investors globally billions.

Rating agencies are meant to give comfort about an issuer’s ability to repay debt. Ratings are essential in determining the level of