ABSTRACT
This chapter represents a primer on the credit rating industry. In terms of the global market for credit ratings there are two important aspects. Firstly, the global ratings industry contains over 100 rating agencies, with the vast majority being concerned with local economies or specialised fields. Secondly, this vast market is dominated by only three agencies, with Standard & Poor's, Moody's and Fitch controlling over 90 per cent of the market. The rating process differs between the leading agencies. Though most agencies have rating committees, some agencies tend to place more emphasis upon statistical modelling programmes which results in a more mechanical process. Credit ratings have a variety of uses in terms of regulatory usage and are utilised by regulatory agencies across a broad spectrum of financial industries. The regulation of the ratings industry in the United States is primarily a statutory endeavour, with the Judiciary and Department of Justice being mostly concerned with elements of fraudulent or criminal behaviour.
