In response to criticism of the ratings they assigned before the credit crisis, credit rating agencies now:
A) a. are paid through fees assessed on the purchasers of bonds.
B) a. are depending more on sensitivity analysis in which they assess how creditworthiness may change in response to abrupt changes in the economy.
C) a. are not allowing the employees who promote an agency to influence the ratings that the agency assigns.
D) a. B and C

Question

Quizplus · Accepted Answer

Choice A is not entirely accurate as credit rating agencies have always charged fees for their services; however, after the credit crisis, they have become more transparent about their fee structure. Choice B and C are both correct. Credit rating agencies are now relying more on sensitivity analysis to take into account abrupt changes in the economy, and they have implemented policies to prevent any potential conflicts of interest. Therefore, the best choice is D, which includes both B and C.

In Response to Criticism of the Ratings They Assigned Before