Ethics behind Credit Rating Agencies business and the role of Assignment

Ethics behind Credit Rating Agencies business and the billet of regulator issues - subsidisation ExampleThe credit rank agencies plays an important role in assessing the credit worthiness of the ships company. Creditworthiness is considered as a parameter in evaluating the willingness and the capacity of the debtor to repay the debt. There are various credit judge agencies in the world. Among the various credit agencies, the three most popular and well known credit grade agencies are Standard and Poor, Fitch group and Moodys. Each credit evaluation agencies has its own rating scale for ranking and rating the companies across the world (Bahena, 2010).The Credit rating agencies played an important role in influencing and facilitating the investors to invest in the international securities. The credit rating agencies have devoted themselves in conception the structure of the agencies. The Credit rating agencies were assigned with responsibilities during the head of financial cri sis prevailing in the economy. But it has been notice that the agencies were unregulated before the financial crisis. After the financial crisis the government has imposed restriction and emphasized on maintaining transparency in its rating procedures for the growth and development of the agencies.The credit rating agencies faced criticism during the period of financial crisis, since it failed to publish verifiable and valid data about the rating performance of the companies. The criticisms encountered by the rating agencies were mainly due to the following reasons such as the underestimation of the correlation due to the default during the economical downturn, the lack of sufficient data, overreliance on the statistical and mathematical methodologies by the credit rating agencies has resulted in furnishing of little data and the disregard of various conflicting interest. The credit rating agencies receives revenue from the issuers of the companies. Suppose a company is rated hig h by one credit rating post as compared to other credit agency then the company will prefer to rate