The history of sovereign ratings and the emergence of the three major sovereign credit agencies

Sovereign credit ratings seem to have real effect on investor behaviour and market conditions and the rating of government bonds, as a private activity, was, however, introduced only in the beginning of 1900, although well-organised government bond markets existed even before 1600. Such activity was then meant to provide investors with objective analyses and independent assessments of the capacity of issuers of sovereign debt to face their obligations. Historical information and discussion of sovereign credit market and major agencies will facilitate a greater understanding of the function and the evolution of sovereign credit rating.