Crisis of faith

Credit rating agencies have received much of the blame for the current credit crisis, and many are calling for these entities to be regulated in some way. But who would do it, and how? Duncan Wood assesses the options, and questions whether regulation is the way forward

The first half of 2008 has seen a deluge of comment on the role played by the big rating agencies in the year-old credit market crisis, but perhaps the most succinct summary of the agencies' failure can be found in the report published by the Securities and Exchange Commission (SEC) on July 8, following a 10-month investigation. In one of the two million emails and instant messages that were turned over to the SEC, one unnamed agency analyst tells a colleague of her fear that the firm's model

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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