ABSTRACT
American credit rating agencies, Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings, rate some $70 trillion in debt securities around the globe. In this chapter I review the history of the agencies, examine current debates, including some of the key criticisms of the agencies, and consider the most important emerging issues, especially those associated with the global financial crisis that started in 2007. In the chapter I also briefly comment on the likely post-Covid impact of the agencies on public finance. I argue the agencies have become increasingly important non-state actors with the shift from a world of mainly intergovernmental organization to a more complex world of global governance. Rating agencies have acquired influence because they fit with the predominantly managerial objectives of global governance institutions. The rating agencies are private and turn such political problems as funding a bridge’s construction into seemingly technical issues. This transformation of financial issues reduces the scope for political debate. Recurrent episodes of ‘rating failure’ - and the criticism of the agencies this generates - highlight the fragility of non-state forms of global governance.
