What are the evaluation agencies?

evaluation agencies are organizations that create credit rating for securities, such as bonds. These agencies play a strong and important role in the financial landscape because the credit rating can create or break the company. They regularly publish updates to the general public and investors, governments and financial companies. Although these agencies are extremely strong, they were also criticized, especially in the 2008-2009 financial crisis, in which dubious credit rating was accused for supporting financial problems in some regions. These agencies generally issue credit rating for securities or securities in a particular area, as well as Moodys in the United States, and sometimes several rating agencies evaluate securities issuers in the same country. Evaluation of the outlog view of the company's performance, the performance of securities issued by companies and problems such as economic trends. The rating allows people of RozlišovT among investment investment, securities that may be of marginal nature, and securities that are "unsolicited", unsuitable for investment. Evaluation agencies can evaluate financial companies, individual companies issuing securities such as stocks and bonds, and governments that commonly use bonds and other debt obligations as a tool for obtaining a fund.

One of the biggest problems that suffered from rating agencies is that the evaluation can lag behind information in real time. The company can continue to receive AAA assessments, for example, long after it turns out that the company has problems. The evaluation agencies were also criticized for close relations with the company leaders and the inability to properly evaluate comprehensive financial instruments. For example, when a huge group of mortgages is associated, the fund may have a higher rating than they deserve because it is for a rating agencydifficult to achieve an evaluation.

Another problem with rating agencies is that downgrade rating can cause financial problems. For example, if a rating agency reduces the state government, this government will be more difficult to acquire capital due to financial performance problems. As a result, downgrade can put the government into an even more unpleasant position that makes recovery more difficult. Although it can be argued that the evaluation is a valuable service that allows wise investments, the effects of downgrads rating agencies can be very significant.