Credit Rating Agencies

Credit rating agencies (CRAs) are an integral part of the capital markets, providing assessment of default and loss probabilities on a variety of fixed-income instruments worldwide. While their processes are unique, their ratings reflect their reviews and analyses of everything from sovereign debt and public finance debt issues to traditional corporate bonds, asset-backed securities, and a host of structured instruments.

Declining performance in many of the subprime mortgage-backed securities rated by CRAs during 2006 and 2007 led many to question the diligence, performance, and even - to date with no supporting evidence - the integrity of these entities. Throughout this period, the CFA Institute Centre has actively engaged in discussions with CRAs about their performance and has responded to a number of regulatory initiatives, press requests, and member inquiries, including direct communications with CRA officials and discussions with and comments to regulators in Europe and North America.

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