Credit ratings are a necessary evil: Gary Jenkins column

Credit rating agencies have been an easy target for investors’ ire – and in many cases the condemnation has been justified. But ratings perform an important function in the markets.


When I first started working in the capital markets, rating agencies were viewed as independent arbiters of credit quality and accorded a modicum of respect. It was a long time ago.

I recently read three books about the financial crises in quick succession: Complicit by Mark Gilbert, The Big Short by Michael Lewis and Too Big to Fail by Andrew Ross Sorkin. A common theme connecting the three books was that the rating agencies were easily manipulated, their models questionable and the final

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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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