Major reforms should be pursued to enhance the accountability and effectiveness of Credit Rating Agencies (CRAs) according to a new report from the C.D. Howe Institute. In “A Question of Credibility: Enhancing the Accountability and Effectiveness of Credit Rating Agencies,” Stéphane Rousseau, Chair in Business Law, Université de Montréal, notes in the wake of the financial crisis, Credit Rating Agencies (CRAs) have been criticized for playing a significant role in the market turmoil. He critiques the regulatory responses so far by Western governments, and proposes three more effective reforms.
“Canada’s response so far, like those in the US and EU, doesn’t go far enough and arguably goes in the wrong direction by adding another layer of cumbersome regulation,” he says.