ABSTRACT
Credit rating agencies have become a focus of political and media attention since the Asian financial crisis of 1997–1998, as people have repeatedly questioned the accuracy and timeliness of their ratings with successive episodes of rating "failure". This chapter begins with a discussion of the history and growth of these agencies, which is followed by discussion of competing perspectives. It explores the current debate about the efficacy and challenges facing the agencies linked to the aftermath of the global financial crisis. Rating agencies have acquired greater salience because they fit with the predominantly managerial objectives of global governance institutions. Recurrent episodes of rating failure and the associated criticism of the agencies highlight the fragility of non-state forms of global governance. The subprime crisis that began in 2007 caused dismay and panic throughout governing circles in developed countries as efforts to reignite confidence in the financial markets failed.
