Credit-rating-agencies Direct

The history of Credit Rating Agencies (CRAs) is a tale of how "opinions" evolved into the bedrock of global finance, transforming from simple guidebooks into powerful gatekeepers that can decide the fate of entire nations. 🚂 The Birth of the Industry (1900s–1920s)

: Firms like Poor’s (1916), Standard Statistics (1922), and Fitch (1924) follow suit, selling thick manuals directly to investors—a "user-pays" model. ⚖️ From Optional to Essential (1930s–1970s)

: Today, agencies are under pressure to include long-term risks like climate change and sustainable development goals into their models. junk status) affect a company's ability to borrow? credit-rating-agencies

By the early 21st century, CRAs were rating complex financial products, like mortgage-backed securities, with the highest "AAA" grade.

Lawmakers called it a "colossal failure" of due diligence and warned of "huge conflicts of interest" inherent in the issuer-pays model. 🌐 The Modern Gatekeepers (Present Day) The history of Credit Rating Agencies (CRAs) is

Instead of charging investors for manuals, agencies began charging the companies and governments being rated.

: Agencies held "investment-grade" ratings on Enron just five days before it declared bankruptcy. junk status) affect a company's ability to borrow

: In the early 1970s, the business model flipped from "investor-pays" to "issuer-pays".