The demand, which has been increasingly voiced in the wake of the subprime crisis, for rating agencies to disclose their rating models in detail to the supervisory authority by law or regulation. – However, this would mean that rating agencies would only use information that is publicly accessible; private, confidential information – not least from informants in the company in question – could no longer be included in the judgment; the rating would therefore be worse as a result; – companies rated would design and structure their data in such a way that they would receive better grades (notches); and – new financial products would also be fitted into the rating agency’s grid from the outset (adjusted in advance; “hinneindesignet” in the jargon), because the rating benchmarks are known: However, this is precisely what has produced ultimately worthless securitized securities – as has occasionally been shown in the subprime crisis. – See rating agency, legal requirements, rating adjustment, whistleblower.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/