This brief but important article from economist Alice M. Rivlin and analyst John B. Soroushian presents a unique slant on the flaws in the current credit rating system for traded securities, a little-discussed but critical topic, given the credit rating agencies’ outsized role in contributing to the 2008 financial crisis. getAbstract recommends this timely reminder of a crucial issue still pending resolution to fixed-income analysts, credit risk managers, economists and financial professionals.
In this summary, you will learn
- Why the credit rating system is inherently flawed and fraught with conflicts of interest,
- How inflated credit ratings on debt securities helped spark the housing bubble and 2008 financial crisis, and
- What reforms are necessary to help make the credit rating system more credible and independent.
About the Authors
Alice M. Rivlin is a senior fellow in economic studies and health care policy at the Brookings Institution. John B. Soroushian is a senior policy analyst at the Bipartisan Policy Center.
Get the key points from this report in 10 minutes.
For your company
We help you build a culture of continuous learning.
Comment on this summary
Customers who read this summary also read
Brookings Institution, 2016
R. Jesse McWaters et al.
World Economic Forum, 2015
Martin Neil Baily and Aaron Klein
Brookings Institution, 2017