MAF008 Credit Rating Agencies: A South African Perspective

This paper provides a critical analysis of the Credit Rating Agencies (“CRAs”) from a South African perspective. CRAs seem to have gained notoriety for the role they played leading up to the 2008 financial crisis. This paper shows how CRAs became central to debt capital markets around the world. In the past, it seems that regulators placed undue reliance on CRAs which gave them immense power. Following the 2008 crisis, regulators worldwide are trying to reduce the power wielded by CRAs. Important topics such as the CRA business model, competition in the industry, CRA accountability and the South African Credit Rating Services Act (among others) are addressed in this paper.