Ethics behind Credit Rating Agencies business and the role of Assignment

Ethics behind Credit Rating Agencies business and the role of regulator issues - Assignment ExampleThe realisation rating agencies plays an of the essence(p) role in assessing the realisation worthiness of the 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 rating agencies in the world. Among the various credit agencies, the three most popular and well known credit rating agencies are Standard and Poor, Fitch sort out and Moodys. Each credit rating agencies has its own rating scale for ranking and rating the companies across the world (Bahena, 2010).The Credit rating agencies played an primary(prenominal) role in influencing and facilitating the investors to invest in the international securities. The credit rating agencies have devoted themselves in designing the structure of the agencies. The Credit rating agencies were designate with responsibilities during the per iod of financial crisis prevailing in the economy. But it has been observed that the agencies were unregulated before the financial crisis. After the financial crisis the government has imposed restriction and emphatic 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 sensible 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 inadvertence during the economic downturn, the lack of sufficient data, overreliance on the statistical and mathematical methodologies by the credit rating agencies has resulted in furnishing of inadequate data and the disregard of various self-contradictory interest. The credit rating agencies receives revenue from the issuers of the com panies. Suppose a company is rated high by one credit rating agency as compared to other credit agency then the company will prefer to rate