Is there any viable future for the credit rating industry in Europe? Analysis of new set of regulations set up by the new European institution (ESMA) charged to supervise the credit rating industry.
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- Credit Rating Agencies have been highly criticized for their influence on financial market. Investors have been too dependent on credit ratings realized by these agencies in their investment decision and the crisis 2008 has put into evidence the errors made by Credit Rating Agencies. It has also allowed market agents to realize that systematically considering Credit Rating Agencies opinions could lead to mistake in their decisions. In a first step, this master’s thesis analyses the regulations that have been put into force after the crisis 2008 in the European financial market. It is focused on the so-called CRA III regulation –regulation (EU) NO 462/2013 – and on the mechanisms to reduce the reliance on ratings realized by Credit Rating Agencies in the European market. It aims to draw a picture of the new regulatory framework and to evaluate the consequences for market agents. In a second step, this master’s thesis analyses alternatives to credit ratings made by these agencies in order to show investors potential different choices that could help them to determine the credit risk of their investments. Through this two analysis, this master’s thesis attempts to determine if the industry still benefits to investors.