Damien and Guillaume - Rating Agencies

What follow up questions and comments do you have for Damien and Guillaume?

Do you think that the U.S. government apply pressure on the credit agencies to adversely (or beneficially) effect other countries at times that are in the interest of the U.S.?

Admin wrote:Do you think that the U.S. government apply pressure on the credit agencies to adversely (or beneficially) effect other countries at times that are in the interest of the U.S.?

It's possible but i think it's very risky for world relations in a capitalist system in which the rating have a lot of influence on investors.
How the U.S. government could do it?

In your opinion, could these rating companies still be trustworthy after the credit crisis of 2008 ?

Good subject and very good presentation. You knew how to be clear in your remarks (and that, in spite of the problem and thus wihtout visual support). Besides the role play was very interesting.

I think of it's possible, the U.S. government apply pressure on the credit agencies, given the power of the U.S and the importance these notes have in investment decisions.

The role play was an excellent way to explain the problem. It made the role of rating agencies very clear.

Admin wrote:Do you think that the U.S. government apply pressure on the credit agencies to adversely (or beneficially) effect other countries at times that are in the interest of the U.S.?

For me it's possible because it Will be profitable for them and their reputation in order to improve the exchanges between the companies

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The movie "the big short" showed perfectly what happened in 2008 , there was too much overrated bonds by S&P and Moodys, the people who seen that anomaly start to sell those CDO (collaterized debt obligation) by using swap contracts (because no one would take a short on a bond in normal situation). In fact there are strong doubt about the credibility of their ratings.

Hi guys, I was wondering what was the economic impact for an unrated company? Because when investing in the markets an unrated company sends back a picture of small company not very developed I feel. In this case, even though the rating agencies may not be objective when assigning a rating, it is still better for a large international company to be noticed than to not have a rating of all.

Hi, you dit it well without any powerpoint so good job for that !
Do you think that as all rating agencies are American they may lack objectivity on the US debt rating or to go easier on US companies ?

The role was a good way to understand the subject.
In my opinion, I think it’s possible because it is the power of the USA and makes these companies well rated

Do you think it would benefit the economy if the agency were to close ?

If the rating of company or other financial product is good, it will be good for the economy because all the user know the risk they take but the rating agency can be corrupt and the world economy can have big problem

Admin wrote:Do you think that the U.S. government apply pressure on the credit agencies to adversely (or beneficially) effect other countries at times that are in the interest of the U.S.?

I think it's possible that government apply pressure on the credit agencies, but we can'nt prove it.

Nasser wrote:In your opinion, could these rating companies still be trustworthy after the credit crisis of 2008 ?

I think the notation is always interesting. however, their method of remuneration should be reviewed

cassandra wrote:Good subject and very good presentation. You knew how to be clear in your remarks (and that, in spite of the problem and thus wihtout visual support). Besides the role play was very interesting.

I think of it's possible, the U.S. government apply pressure on the credit agencies, given the power of the U.S and the importance these notes have in investment decisions.

thank you cassandra. To my advice it's mainly the big companies that are puting pressure on the credit agencies.

guillaumborderon wrote:

cassandra wrote:Good subject and very good presentation. You knew how to be clear in your remarks (and that, in spite of the problem and thus wihtout visual support). Besides the role play was very interesting.

I think of it's possible, the U.S. government apply pressure on the credit agencies, given the power of the U.S and the importance these notes have in investment decisions.

thank you cassandra. To my advice it's mainly the big companies that are puting pressure on the credit agencies.

Yes, I agree with you. But at the same time, I think, in many cases, governments and big industries are link.

Do you think , could there be birth in the near future of a global rating agency instead of having several independent?

clementbiaunier wrote:Do you think , could there be birth in the near future of a global rating agency instead of having several independent?

For freedom of competition it is not possible

"For freedom of competition it is not possible"

Ok, I agree with you.

Olivier jouanneau wrote:Do you think it would benefit the economy if the agency were to close ?

it will not change anything, because it's not the rating agencies that created the crisis.

clementbiaunier wrote:"For freedom of competition it is not possible"

Ok, I agree with you.

thx, I'm always right.

Victor L wrote:Hi, you dit it well without any powerpoint so good job for that !
Do you think that as all rating agencies are American they may lack objectivity on the US debt rating or to go easier on US companies ?

I don't think because every rating agency has a business in every country.

Victor L wrote:Hi, you dit it well without any powerpoint so good job for that !
Do you think that as all rating agencies are American they may lack objectivity on the US debt rating or to go easier on US companies ?

Yes it's possible. It's the same example as a public rating agency which has to rate his own state or his companies, these notes could be suspect.

noemiechaumont wrote:Hi guys, I was wondering what was the economic impact for an unrated company? Because when investing in the markets an unrated company sends back a picture of small company not very developed I feel. In this case, even though the rating agencies may not be objective when assigning a rating, it is still better for a large international company to be noticed than to not have a rating of all.

Indeed if you want to invest in an unrated company, you have to determine the risk of this company, in addition if these companies isn't rated, it's because they are too small to be rated. Often a small campany is higher risky than a bigger company.
To conclude if you are'nt rated you are consider like a small and risky company so it's hadder to find finnancing.