"The "Big Three" global credit rating agenciesU.S.-based Standard and Poor's (S&P), Moody's, and Fitch Rating shave come under intense scrutiny in the wake of the global financial crisis. Meant to provide investors with reliable information on the riskiness of various kinds of debt, these agencies have instead been accused of exacerbating the financial crisis and defrauding investors by offering overly favorable evaluations of insolvent financial institutions and approving extremely risky mortgage-related securities."          [Council on Foreign Relations, 2015]

2. Explain the motives behind the credit ratings agencies. [3 marks]
4. Deliberate the process of credit rating. [12 marks]
6. Evaluate the rationales behind why the above event occurs. [10 marks]

[Total: 25 marks]

Answer rating: 100% (QA)

Answer Motives behind the Credit Rating Agencies 1 Revenue Generation The primary motive of the Big Three credit rating agencies SP Moodys and Fitch i... View the full answer