The principal-agent problem is broad enough one that it can be found in a wide variety of contexts. An example of how the principal-agent problem occurs between ratings agencies and the companies (the principals) that hire them to set a credit rating.
In the spring of 2007, a sudden downgrade by a prominent Credit Rating Agency .. is the Agency Dilemma or the Principal Agent (P-A) Problem (Hartwall and
Financial regulators recognize certain credit rating agencies for regulatory purposes. However, it is often argued that credit rating agencies have an incentive to assign inflated ratings. This paper studies a repeated principal-agent problem in which a regulator approves credit rating agencies.
4.3 Credit rating agencies in the corporate governance system . .. principal agent framework from chapter 3 to the credit rating industry. The second . principals, is in economics referred to as the principal-agent problem.
investors (i.e. principal-agent problems).1 The role and influence of credit rating agencies has expanded significantly over time. A large number of market
Principal Agent Problems in the Financial Crisis of 2007-2009 . Set up a gateway between rating agencies and their customers, which protects their
However, it is often argued that credit rating agencies have an incentive to assign inflated ratings. This paper studies a repeated principal-agent problem in
Credit rating agencies have come under increased scrutiny since the financial crisis. . The RAs have, in principle, list-price schedules for the issuer, but regular information to markets on the likelihood that a bond-issuing agent - company
I analyze credit rating agencies (CRA) as NMRs of financial markets. Credit concludes that the typical principal-agent problems can be overcome by properly
principal-agent problems, such as capping the amount of risk that the CREDIT RATING AGENCIES NO EASY REGULATORY SOLUTIONS worthiness of a