role and importance of credit rating agencies

Credit rating agencies play a crucial role in assessing the creditworthiness of governments, corporations, and financial products. They assign ratings that indicate the ability of entities to repay their debts, providing investors with valuable information for making informed investment decisions. These agencies have a significant impact on financial markets, influencing interest rates, investment flows, and overall market stability. Their objective evaluations guide market participants and promote transparency, facilitating efficient capital allocation and reducing information asymmetry.

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