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Title:THE ROLE OF THE RATING AGENCIES IN THE CURRENT FINANCIAL CRISIS
Authors:Filipov, Petar (Author)
Jagrič, Timotej (Mentor) More about this mentor... New window
Files:.pdf UNI_Filipov_Petar_2012.pdf (749,27 KB)
 
Language:English
Work type:Final seminar paper (mb14)
Typology:2.11 - Undergraduate Thesis
Organization:EPF - Faculty of Business and Economics
Abstract:The Subprime crisis that occurred in 2007-2008, was the most disturbing and severe crisis since The Great Depression. The global stock market indexes and housing prices noted a sharp drop. Big corporations, conglomerates, defaulted, were acquired and bailed out, since they could not meet their financing obligations. Substantial number of people lost their jobs worldwide and a lot of sectors in the economy were struggling. Within this Bachelor seminar paper, it is presented how the credit rating agencies influenced the credit crunch. The main issue discussed in this seminar work is the role of the rating agencies in one of the greatest crushes in history. They (the agencies), actually, participated in creating the structured financial products, which during the housing bubble were increasingly trading. These structured financial products were very complex and highly risky and maybe, the most crucial cause of the crisis. First, in the seminar paper it is described how the agencies work and their origins. As in the last century, Standard and Poor’s and Moody’s, emerged to great power in the financial system with assigning ratings to issuers of debt. This position in the financial world that the agencies held, has brought many academicians to doubting the possible moral hazard problems within the credit ratings business. Furthermore, it is explained how the financial turmoil emerged and the trends that preceded the credit crunch. Questions regarding the role of the agencies in the securitization process are discussed. For instance, were the rating agencies biased; were the ratings on the structured financial products inflated and if so, what were the incentives for it? Several theories and empirical evidence has been put forward concerning the importance of the ratings in the securitization process. It is concluded in this paper, that the ratings assigned to the financial derivatives were inflated and the agencies noted increased returns from it, which presents the incentives of the agencies during the housing bubble. These empirical findings also indicate of moral hazard problem within the ratings system.
Keywords:Credit rating agencies, Financial crisis, Structured financial products, Securitization, Inflated ratings, Moral hazard
Year of publishing:2012
Publisher:[P. Filipov]
Source:Maribor
UDC:338.1
COBISS_ID:11231004 Link is opened in a new window
NUK URN:URN:SI:UM:DK:XRVHFQWR
Views:991
Downloads:69
Metadata:XML RDF-CHPDL DC-XML DC-RDF
Categories:EPF
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Secondary language

Language:Slovenian
Title:VLOGA BONITETNIH HIŠ V AKTUALNI FINANČNI KRIZI
Abstract:Finančna kriza 2007-2008 je bila najbolj huda in moteča po Veliki Depresiji v 1929. Nastale so ogromne izgube, ki imajo velike posledice na gospodarstvo povsodi v svetu. Dosti družb so šle v stečaju zaradi nezmožnosti izplačila finančnih obveznosti, kot enega izmed največjih investicijskih bankah Lehman Brothers. Bear Stearns investicijska banka je bila odkupljena od J.P. Morgan & Chase, potem je bilo veliko javnih potkrepah za korporacije ki so bili ''too big to fail'', kot je primer z zavarovalnice AIG. Poleg tega so borzne indekse strmo padle, cene nepremičnin so bili rekordno znižane, likvidnost denarnega trga je evaporirala in to je povzročilo številne intervencije centralne banke. Precejšno število ljudi je izgubilo svoje delovno mesto po vsem svetu in veliko sektorjev gospodarstva so bili v problemah. Ker je bilo dovoljeno veliko zadolževanje (eng:leveraging) ter prevečjo trgovanje z neregulirane tvegane finančne produkte, je prišlo tudi do probleme, oz., krizna državnega dolga. Torej, v hipotekarni krizi, bonitetne agencije so imeli posebno nalogo. Ker so novi finančni instrumenti postali zelo aktuelnih in so zasegale velik delež finančnega trga, bonitetnih hiš so z dodeljevanje bonitetnih ocen za vsak instrument pošiljale informacij do investitorji v zvezi z kredibiliteta izdajatelja teh instrumentov. Ti instrumenti so bili dejansko izvedeni finančni instrumenti ki so nastale z združevanjem številnih portfeljev vrednostih papirjev, ki so jih potem strukturirale v obrokih in prodale investitorje, glede na tveganost neplačila. Instrumente so strukturirane finančne produkte in so zelo komplekse, vendar zelo donosni in, kot se je izkazalo, zelo tvegane. Strukturirane finančni produkti so, morda, najpomemgnejši vzrok krize. Ker agencije niso mogli dodeliti ustrezne ocene, z napačnih bonitetnih ocenah so reklamirale produkte za investitorje in s tem, so postali en vzrok več za tistem kar se zgodilo v letih 2007-2008. Glavni problem obravnan v diplomskem seminaru je, kakšno je vlogo ki so imeli bonitetnih hiš v finančni krizi, kako so vplivali na finančno krizo in kako velik je njihov učinek. Bonitetne agencije, bolj konkretno, ''velika trojka''-Moody's, Standard & Poor's in Fitch- so imeli zelo zanimiv del v celotni igri, ki je postavila temelje za hipotekarno krizo. Torej glavno vprašanje je, ''kaj točno so bonitetnih hiš naredili da so povzročili takšno krizo ki bi imela tak katastrofalni učinek na gospodarstvu?''. V zvezi z glavno raspravo vo tem seminarske naloge, še drugih vprašanj se postavaljajo o tem, ali agencije so dali napihnjene ocene in kakšne so njihove spodbude. Ali je moralni hazard prisoten v sistem bonitetnih ocen in, ali je tudi bil prisoten konflikt interesov? Vse to so pomembna vprašanja in detalji ki se nanašajo na bonitetne agencije in jih treba pregledati, da se predstavi končnega sklepa o vlogi bonitetnih agencij v krizi. Torej, glavni cilj diplomskega seminarja je, odgovori teh vprašanj, predstaviti razne teorije v zvezi teh problemov in tudi prikazati eno empirično sliko o vlogi bonitetnih hiš. Najprej v seminarski nalogi so predstavljenje bonitetnih agencij in njihove lastnosti, ter modele dodeljitev bonitetnih ocen in lastniki agencij. Že iz časa prve oficijalno objavljene ocene od John Moody, v 1909, beonitetnih hiš so dospele do velik kredibilitet in moči vo finančnem sistemu. Dosti avtorjev so kritikovali da so agencije delali v oligopol in da je v takšen sistem vedno pristen moralni hazard. Kjub temu, agencije z največji vpliv oziroma delež na finančnem trgu so, Moody's Investor Service, Standard & Poor's, ter Fitch Ratings. Potem, vo diplomskem nalogu je predstavljena vo podrobnosti finančna kriza iz 2007-2008 in trendi ki so privedle do krizi. Vendar pa proces securitizacije oziroma nastajanje teh kompleksnih strukturiranih finančnih produktov ki so bili glavni vzrok za finančni krizo, je tudi eksplicitno predstavljen. Glede na to kako se odvijala kriza i kaj je bilo glavni vzork za te prob
Keywords:Bonitetnih hiš, Finančno krizo, Strukturirane finančne produkte, Listinjenje, Napihnjene ocene, Moralni hazard


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