Role of Credit Rating Agencies

Credit rating agencies assess the risk of investing in corporations and governments and provide credit opinions on the ability of companies and countries to meet their debt obligations.

They also provide a wide array of financial data and information on bonds, equities and mutual funds.

They bridge the information gap between issuers and investors and a source of credit surveillance for investors by monitoring and disseminating credit opinions in a timely and efficient manner.

They also provide outlook on government securities, like positive, negative, stable, etc.

Opinions and views of credit rating agencies are vital to investment decisions made by banks, pension funds and other financial institutions.

Bondholders and shareholders rely on the advice of the three big credit rating agencies. Their views can stroke millions of bond and share prices and can move markets in an unpredictable ways, creating a strong riffle effect.