Credit Rating Agencies' Accountability: Short Notes on a Global Issue

Abstract

In the aftermath of the financial crisis, credit rating agencies (CRAs) have come under open criticism in the public and legal discourse. The picture that has broken the surface is one in which CRAs ended up compromising the quality of their activities in order to facilitate the selling of services and snatch or defend market shares in a thriving environment. Nevertheless, in the U.S. and in Europe, CRAs still are almost immune from any form of civil liability, and the regulatory approaches still content themselves with focusing on the use of the same administrative tools that have so far proved to be largely ineffective. All this explains why the debate has started questioning the reasonableness of keeping the private for-profit nature of the agencies, instead of straightforwardly transforming them into public bodies. But the answer about the optimal nature of, and the most appropriate deterrence model for the agencies may only come from considering a different perspective, which puts in place, not a national/regional plan aimed to fence off local misbehavior, but a global strategy to ensure worldwide appropriate accountability for CRAs. In this direction, the issue can be tackled under either a centralized-political, or a decentralized-judicial point of view.