Financial Crisis Todd McTigue INTRO In 2008‚ the United States experienced a major financial crisis which led to the worst recession since World War II. Both the financial crisis and the downturn in the U.S. economy spread to many foreign nations‚ resulting in a global economic crisis. In the months following the initial decline‚ the U.S. stock market plummeted‚ liquidity dried up‚ successful companies began laying off employees
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received high ratings from one of the agencies. A Congressional panel called them “essential cogs in the wheel of financial destruction." Critics say there is a conflict of interest inherent in the fact that the agencies are paid by the entity whose debt is being rated -- a bit like a restaurant reviewer being hired by the chef -- and investigations turned up evidence that analysts felt pressured to give investments a clean bill of health or risk losing business. Without question‚ the credit rating
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The Giant Pool of Money Analysis The housing crisis that occurred less than a decade ago is a great example‚ and has become an extensively covered case study‚ of how dangerous certain biases and heuristics can become if left unchecked on a massive scale. Alex Blumberg and Adam Davidson‚ in collaboration with NPR News‚ put together a special program titled “The Giant Pool of Money‚” where they explore just how the phenomenon occurred and the underlying factors that contributed through sound bites
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A PROJECT REPORT ON “CREDIT RATING AGENCY” Submitted in partial fulfillment of the requirement for the award of degree of Masters of Management Studies (MMS) under University of Mumbai. Submitted By SOHEL I. DATRE Reg. No. 06 BATCH: 2008-2010 Under the guidance of Dr. N. Mahesh A.C.PATIL COLLEGE OF ENGINEERING‚ MANAGEMENT STUDIES AND RESEARCH KHARGHAR‚ NAVI MUMBAI: 410 210 ACKNOWLEDGEMENT I wish to take this opportunity to express my deep sense of gratitude to Dr
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after the financial crisis‚ European and US regulators have yet to solve the problem of biased credit rating opinions. Ideas for radical reforms of the industry have failed. Issuers still pay the bills and still get to choose which agency rates their debt. The oligopolistic structure hasn’t changed – Standard & Poor’s‚ Moody’s and Fitch together rate 96 per cent of all the world’s bonds. Why does the post-crisis landscape look such a lot like it did pre-crisis? Intense lobbying by powerful market players
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fully comprehend. AIG started investing in many different types of securities which included mortgage backed securities and also credit derivatives trading. AIG then went ahead to become a leading player in these markets‚ insuring other company’s debt obligations against losses due to its excellent credit rating at the time. It was AIG’s Financial Product Unit (AIGFP) that brought about the fall of the company‚ due to its disastrous credit swaps product. AIGFP was founded in the year 1987 by
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Federal Reserve Bank of New York Staff Reports Shadow Banking Zoltan Pozsar Tobias Adrian Adam Ashcraft Hayley Boesky Staff Report No. 458 July 2010 Revised February 2012 FRBNY Staff REPORTS This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessarily reflective of views at the Federal Reserve
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Credit Rating (CR) as financial service‚ has come a long way‚ since John Moody first introduced the concept 1909. In India it started in 1988. Credit rating is has been used to rate debt instrument viz. Fixed Deposit‚ Commercial Paper Credit rating is a technique of credit risk valuation for the corporate debt instruments reflecting borrower’s expected capability and inclination to pay interest and principal in a timely manner. * In evaluation both qualitative and quantitative criteria are
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Berhad and also Rating Agency Malaysia which now known as RAM Holdings Berhad. To begin with‚ let’s us know about MARC which provides full-service rating agency that provides ratings or issues of commercial papers‚ bonds‚ long term and short term debts and preferred shares‚ as well as asset-backed securities. This company also offers industry analyses‚ rating reports and rating indices for issuers and investors locally and globally. Not only that MARC advises the issuers or big players in business
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Electronic copy available at: http://ssrn.com/abstract=1609817 CREDIBILITY OF THE IPO GRADING: TIME TO RETHINK KARTIKEY MAHAJAN & MALLIKA ANAND Prologue Initial Public Offer (hereinafter as ‘IPO’) in the new regime (which started as an innovation) has to be mandatorily graded by a Credit Rating Agency (hereinafter as ‘CRA’). This optimization of the IPO by the Securities and Exchange Board of India (hereinafter as ‘SEBI’) has been seen as a market innovation to ensure the credibility of
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