The global financial meltdown: what happened to the gatekeepers in the US and the EU and what to do about them?

Abstract

This paper argues that global credit rating agencies as financial gatekeepers should be made accountable to investors for serious failings such as those associated with them in the 2008 global financial crisis. It further argues that current regulatory reforms in the US and EU are steps in the right direction but need to be reinforced by incentives-based initiatives and credible threats from litigations including competition from viable alternatives in order to safeguard effectively the interests of investors and contain global systemic risks.