BIS paper slams rating agencies
A new paper just published by the Bank for International Settlements' Monetary and Economic Department, titled 'Are credit ratings procyclical?' takes a critical view of rating agencies' activities.
The study, based on an analysis of Standard & Poor's credit ratings for banks, concludes that while a full sample of credit ratings shows that ratings change little over the course of a business cycle, and therefore agencies are fulfilling their promise to rate "through the cycle", this is misleading. "The fact that the larger sample of ratings contains few changes and shows
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