ABSTRACT
Despite the crucial role sovereign credit ratings may play in the global economy, the process of their determination seems to be surprisingly subjective and marred by secrecy, especially at level of the rating methodologies, as seen in Chapter 7. As a result, investors, issuers and regulators have been looking suspiciously at the role of CRAs in setting sovereign credit ratings and are uncomfortable with the oligopoly they built, over the years, on the global credit market (CAPCO, 2013). The general negative sentiment is that it does not make sense to entrust private companies, whose primary goal is maximising profit, by the mandate of judging the sovereign solvency and to give opinions that are binding for their users (Council of Foreign Relations, 2015). Regulators appear to be disappointed by CRAs’ situation and are requiring more transparency from them. Although CRAs have indeed acquiesced to some transparency requirement, it is in the form only and CRAs seem to have been engaged in a new era of asymmetry of information.
