Is Rape Culture A Problem - 1405 Words

Torrey Andrascik Professor LaPalme English Comp 101 28 September 2015 Is Rape Culture a Problem in America? Why This Systematic Tolerance Needs to End. Rape culture. This is a term that was coined in the 1970’s feminism movement that has been rehashed with 4th wave feminism amongst millennials in the 2000’s. Though the term seems to irritate many that attempt to refute that the systematic tolerance of rape in America is a non-issue that would disappear if â€Å"women just stopped getting so drunk† (Judge Mary Jane Mowat, 2009) it is in fact a perpetuated problem that plagues todays society. By definition, rape culture is the embodiment that of the â€Å"complex set of beliefs that sexual aggression and can be further defined as being found is in a society that embodies rape culture that women receive a continuum of overly sexualized remarks (cat-calling), to the act of rape itself, and condones that these physical and emotional acts against women are an inevitable fact of life†. Sound familiar? Welcome to our great nation. Though this perpetuation of sexual violence is a normalcy is harmful to women an d even men, across the entire nation, its main impact targets the women and children of low socioeconomic areas, female students on university campuses, and of course, the women who choose to seek justice against our everyday superheroes- the famous, and the athletes. Rape culture is heavily prevelant for those that live in socioeconomically struggling, urban areas. Urban areasShow MoreRelatedSexual Assault And The Criminal Justice System930 Words   |  4 Pageslies heavily in a culture that is unwelcoming to the victims and often leads to the perpetrators being tolerated. The existence of rape culture in western society occurs due to the preservation of violent media, patriarchal standards, and the state of the criminal justice system. This culture cannot be improved until we confront each of these problems to their roots. According to Marshall University’s Women Center, the definition of rape culture is â€Å"an environment in which rape is prevalent and inRead MoreThe Prevalence Of Sexual Assault On College Campuses1371 Words   |  6 Pagesthe term â€Å"rape culture† has been used to show how the victims of sexual assault are blamed and constantly threatened by society. Those that report rape are often not taken seriously, so their perpetrators are not punished for their crimes. The larger problem is that society views the crime of rape as a trivial occurrence and it does not believe or support the victim. Through extensive research on rape culture and the examination of the myths and institutional barriers that allow the problem to continueRead MoreRape Culture Essay1198 Words   |  5 PagesRape culture is prevalent on all college campuses, and many fail to realize this and what rape culture is. It is in the party scene, athletics, in dorm rooms, and everywhere else around campus. It is the acceptance of sexual jokes, saying â€Å"she was asking for it because of what she was wearing,† not taking sexual assault seriously, and so much more. Rape Culture is an environment in which rape is prevalent and in which sexual violence against women is normalized and excused in the media and popularRead MoreCan Evolution Ever Explain Why Men Rape? Essay1646 Words   |  7 Pagesmen rape? Why is it considered a societal norm for men to rape women? Rape can be an act of any sexual activity that is carried out using force or threat of injury against the will of a female. It mostly occurs when the victim is underage, incapable of valid consent (i.e. drunk, drugged), or when there is a known perpetrator (i.e. family member, friend). It is unfortunate that some women get raped even when having no affiliations with the perpetrator. Despite a decrease in the reported rape casesRead MoreRape Culture1369 Words   |  6 PagesIt is six o’clock in the evening, a special news segment on world affairs is on the television. The journalist is doing a piece on inhumane practices that occur in third world countries, one of these travestie s being rape. The voices of women who have been stolen from their homes and have been taken advantage of against their own will infiltrate the air. These personal stories have an incredulously powerful impact on those listening and make one think â€Å"How could such an outrageous thing happen?†Read MoreRape Culture And Sexual Abuse1639 Words   |  7 Pagesthe problems associated with rape culture. Rape culture can be defined as â€Å"a culture in which dominant cultural ideologies, media images, social practices, and societal institutions support and condone sexual abuse by normalizing, trivializing and eroticizing male violence against women and blaming victims for their own abuse† (Huffington Post). Rape culture can be as simple as a T.V. commercial or as complex as a rapist blaming the victim for â€Å"asking for it† and everything in between. Rape cultureRead MoreRape Culture : It Is Believable Or Not1537 Words   |  7 PagesBrown Mrs.Gallos English 3 24 April 17 Rape Culture Whether it is believable or not, rape culture exists in our everyday life, our society, our schools, our colleges, in our country, and anywhere on Earth. It is a problem that has always been around, but it just was not given a name. Rape culture is defined as, â€Å"A society or environment whose prevailing social attitudes have the effect of normalizing or trivializing sexual assault and abuse.† (â€Å"Rape) An example of how this would play out in ourRead MoreThe Monster That Resides Peacefully Among Us1630 Words   |  7 Pagesif she spoke about the incident and ran off. Filled to the brim with Scottish fight and determined to better the world, Lindsay promptly told her parents and the local authorities. Soon after Lindsay began to suffer from the common symptoms faced by rape victims and withdrew from her friends, her family, and her school due to severe depression. Through a lengthy trial, Lindsay was forced to hold up the underwear she was wearing under her clothes, v erbally attacked by defense lawyers and her own accuserRead MoreAnalysis Of Tell Me Theres No Rape Culture1133 Words   |  5 PagesSummary of Ali Owens â€Å"Tell Me There’s No Rape Culture† In â€Å"Tell Me There’s No Rape Culture†, published in the Huffington Post in October of 2016, Ali Owens explains the inconsistent theories on how a woman can prevent getting raped to showcase the fact that the underlying problem is that women are being blamed for the rape. The author states that the problem with society is that women are being shamed and silenced by individuals who do not believe in rape culture. Victims are trapped in a lose-lose situationRead MoreArgumentative Essay : Extremely Wordy Feminist Rant 1153 Words   |  5 Pagesto the Rape, Abuse and Incest National Network (RAINN), approximately 207,500 rapes occur annually in the United States (â€Å"Statistics RAINN†). If we were to spread that out evenly over the 365 days of a year, that would equate to a sexual assault occurring every two minutes. Although the amount of rapes occurring annually has decreased by 60% since 1993 (â€Å"Statistics about Sexual Violence†), that’s still an incredible amount of sexual violence occurring yearly--- a facet of American culture that must

Essay on Autism Spectrum Disorder and its Comorbidities

Autism spectrum disorder is complex in and of itself but that complexity is only compounded by the comorbid conditions that can come with it. Some of these include sensory processing disorder, obsessive compulsive disorder, and seizures. Understanding the disorder and its comorbid conditions is challenging yet important for parents, medical professionals, and educators. A common comorbidity of autism spectrum disorder is sensory processing disorder. Sensory processing disorder is the breakdown in the way the nervous system receives sensory input and translates it into the appropriate responses, motor and behavioral (Sensory Processing Disorder Explained, 2014). In the normal process, the first step there is some kind of sensory†¦show more content†¦This can cause difficulty in functioning with every day activities especially in a classroom setting. In the book The Challenging Child, Stanley Greenspan (1996) explained sensory processing disorder in this way; Imagine driv ing a car that isnt working well. When you step on the gas the car sometimes lurches forward and sometimes doesnt respond. When you blow the horn it sounds blaring. The brakes sometimes slow the car, but not always. The blinkers work occasionally, the steering is erratic, and the speedometer is inaccurate. You are engaged in a constant struggle to keep the car on the road, and it is difficult to concentrate on anything else (Greenspan, 1996, p. 4).† Interestingly, most people who suffer from sensory processing disorder do not have autism spectrum disorder. However, the majority of people with autism spectrum disorder have sensory processing disorder. In fact, studies performed by the Sensory Processing Disorder Foundation have showed that 75% of people with autism spectrum disorder will have sensory processing disorder (Sensory Processing Disorder Explained, 2014). Another common comorbidity of autism spectrum disorder is obsessive compulsive disorder. Obsessive-compulsive disorder is a brain and behavior disorder where the person has unreasonable fears and thoughts that they have to do certain ritualistic or repetitive behaviors. The fear part of the disorderShow MoreRelatedA Research Topic On Autism Spectrum Disorder Essay965 Words   |  4 PagesResearch Topic: NEW 9-28-16 Ariel Robinson Autism Spectrum Disorder is a developmental disorder that displays characteristics of impairments in social interactions and communication, obsessive interests, and repetitive behaviors.1 The DSM-5 characterizes Autism Spectrum Disorder as range of symptoms with varying severity, hence the term â€Å"spectrum†.2 Currently, scientists do not know the exact cause of autism. However, it is agreed upon that the underlying cause is highly likely to be influencedRead MoreThe Characteristics Of Autism Spectrum Disorders ( Asd )949 Words   |  4 Pages 1. What are the characteristics of Autism Spectrum Disorders (ASD)? As described in the textbook, there is a broad range of characteristics associated with Autism Spectrum Disorders (ASD). One of the first characteristics noted with ASD is language deficits, or using language in â€Å"odd† ways. As stated in the textbook, â€Å"Children with classic autism may be nonverbal. Alternatively, they may have significant language difficulties, so that their language may consist primarily of echolalia or delayedRead MoreIs Autism A Developmental Disorder? Essay1619 Words   |  7 PagesExploring Autism in Children Rutgers University Atypical Adolescence and Development Professor. Stevie McKenna November 2nd, 2016 Autism Abstract Autism is a developmental disorder in which an individual has problems with communication and interaction. Autism Spectrum Disorder was adopted as a categorization in 2013 and begins in childhood and follows throughout the course of a child’s life and is actually a collection of developmental brain disorders. There isRead MoreVulnerable Populations: Children with Autism Spectrum Disorder914 Words   |  4 PagesVulnerable Populations: Children with Autism Spectrum Disorder Introduction: Today, we are seeing a rising increase in the occurrence of autism spectrum disorder (ASD) in children. What once used to be a rare disorder is now commonly recognized in the medical field as well as in the community. Not only is autism a health issue in itself, but many health issues come along with the disorder. This paper will discuss the description of the population, the top health issues and their relevance, andRead MoreAutistic Spectrum Disorder ( Asd )3096 Words   |  13 PagesAbstract Autistic Spectrum Disorder (ASD) undoubtedly has neurobiological and genetic underpinnings that correlate with the disorder. There is however insufficient evidence to have them as cautionary factors. What is clear is that the environment and commodities impact the presenting behaviours of ASD. This review delves into neurological evidence of ASD as well is the prevalence of various comorbid conditions, how the environment effects and impacts these and the interventions and strategies thatRead MorePsychhizophrenia Research Paper1333 Words   |  6 Pagesof serious mental illness. Early-onset of illness is a high prediction of poor outcomes for the patient. Severe mental illness diagnoses include schizophrenia, major depressive disorder, bipolar disorder, and autism spectrum disorder. The schizophrenia spectrum includes schizoaffective disorder, schizophreniform disorder and xxxx. The diagnoses fall into xxx categories; xxx, xxxx and xxx. Early onset of schizophrenia (EOS) before the age of 13, is very rare at 0.04 % of population in the United StatesRead MoreImpact Of Autism And Anxiety On Children And Adolescents1349 Words   |  6 PagesImpact of Autism and Anxiety on Children and Adolescents One regarded as rare, autism spectrum disorders (ASDs) – which includes autistic disorder, Asperger’s disorder, and pervasive developmental disorder-not otherwise specified (PDD-NOS), have received a great deal of professional and scientific attention (White, Oswald, Ollendick, Scahill, 2009). ASDs are characterized by impairment in social communication as well as the presence of repetitive behaviors and restricted interests (American PsychiatricRead MorePervasive Development Disorders593 Words   |  2 PagesPervasive Developmental Disorders are characterized by â€Å"severe and pervasive impairment in several areas of development† (Tsai, 1998). In the 1994 edition of the Diagnostic Statistic Manuel version IV, three new categories were introduced under Pervasive Developmental Disorders. These include: Aspergers Disorder, Childhood Disintigrative Disorder, and Retts Disorder (Volkmar, 2005). All these disorders occur in early childhood and are often not notic ed by a parent or primary care-giver until itRead MoreThe Autism Spectrum Disorder ( Asd )1636 Words   |  7 Pagesm Spectrum Disorder This paper will cover many aspects of Autism Spectrum Disorder, also commonly known as ASD. It will identify reginal, national and global statistics of the occurrence of ASD, predisposing factors, usual signs and symptoms of ASD, and tests used for diagnosis. It will also analyze both medical, surgical and psychosocial aspects of the care needed by patients with ASD, interdisciplinary interventions, comorbidities commonly associated with Autism, and the prognosis of these patientsRead MoreUnderlying Causes Of Autism Spectrum Disorder1882 Words   |  8 PagesUnderlying Causes of Autism Spectrum Disorder Ariel Robinson Biology 4800-Fall 2016 Autism Spectrum Disorder is a developmental disorder that displays characteristics of significant impairments in social interactions and communication, obsessive interests, and repetitive behaviors.1 The DSM-5 characterizes Autism Spectrum Disorder as having a range of symptoms with varying severity, hence the term â€Å"spectrum†.2 Figure 1 shows a representation of the symptoms and sub-types of disorders that are characterized

Technical Issues and Service Requests Helpdesk

Question: Discuss about the Technical Issues and Service Requests Helpdesk. Answer: Introduction: There are various features that should be considered in order to manage the effectiveness of the IT helpdesk operations (Esteves Alves, 2013). Among all of these features, two are being elaborated within this assignment. These are explained as follows; Outsourcing Ticket Management and Tracking In consideration with the technical issues and service requests, the helpdesk must be efficient enough in order to respond to their valuable clients according to their demands. Therefore, the efficient management and tracking system of tickets should be there. The effective measurement and operations are mandatory in case of managing the effectiveness of the work in the IT helpdesks (Chapman, 2015). This aspect may sound obvious but it is mandatory enough to incorporate this effectiveness within the work structure of the IT helpdesks. This effective workload management results into huge amount of benefits to the organization as well as individuals of any IT helpdesks in consideration with any technical issues or problems (Iden Eikebrokk, 2014). The fewer amounts of time as well as quality of responses decide the effectiveness of the IT helpdesks. In contrast with all of these above mentioned aspects, the ultimate effectiveness of the helpdesk of any organization in terms decides the effectiveness of the organization itself within the competitive market. Historical Incident Database (Knowledge Base) There are lots of issues that are either managed or resolved by the technical helpdesk team. In consideration with the investigation about the cases handled by helpdesk team this will be found (Chan, Geng Chen, 1999). The work load of the team members can be resolved with the help of knowledge sharing among them. This aspect also makes the team more effective while understanding various perspectives on particular issue that is managed by IT helpdesk team (Iden Eikebrokk, 2014). Based on the knowledge and experiences the team members of the helpdesk can easily manage any kind of problems and issues within their organization as well as within teams. According to Chan, Geng Chen (1991), helpdesks are computer aided environment that helps the customers in solving many issues with respect to their queries through the frontline phone support to the internal and external customers of the concerned organization. For supporting the hardware and software support the helpdesk manages all the calls from the end of customers and clients. The customer satisfaction is very important for meeting their requirement according to the requests of the customers. The core objective of this paper is to present a case based helpdesk system that will be meeting all the requirement of the customer satisfaction. The process of system development, system implementation, verification and knowledge management is discussed with respect to the demands of the customers (Chan, Geng Chen, 1999). Customer support system is there within any organization or any association in order to meet all the customer requirements and other important aspects that needs to be encompassed within the helpdesk department for finding better solutions for the customer issues and problems they are facing. This paper is elaborating case based helpdesk system that helps the customer and call centers to diagnose the problems from the customer queries. First of all background literature is representing two case based background literature for the betterment of the call centers or more specifically helpdesks. In contrast with this aspects, the conventional technology and process used for helpdesk development is also elaborated within this paper (Chan, Geng Chen, 1999). This conventional aspect was useful while analyzing the problem statement and solving these in accordance with the available problem mitigation tools. Suggestions for improving the facts mentioned in the literature Three suggestions are provided for solving the issues involved due to the conventional helpdesk operation skills and approaches: Application of six sigma approach: The helpdesk operations face many issues due to the problem of understanding the voice of the consumer or clients. This creates many issues due to lack of communication and understanding about the problems. Six sigma approaches can resolve these issues with the help of increasing the efficiency of the helpdesk. The approach of lean helpdesk design will be helpful for the organizations. Improvement of pulse and patterns: This is nothing but the new planning stage of the helpdesk for the better understanding of the customers and clients. Search for Satisfaction: This aspect has to be there within the analysis of the customer queries. This aspect was not there previously and this factor must be implemented within the helpdesk operating system. All of these above mentioned suggestions will be helpful in achieving the solutions for the customer quires. These suggestions will provide the guideline to improvise the situations that are mentioned within the concerned paper for settling the helpdesk for any kind of technical issues that is coming from the customer end or client ends. The ITIL based software solutions are important in order to achieve the software matches that are very important for getting flexible configurations (Chapman, 2015). This framework helps the helpdesk operations to take guess works for putting together an optimized IT support required for concerned organization. The established standards will be helpful in solving many issues within the organization as well as from the end of customers (Shafie et al., 2012). This software usage ensures the minimum time requirement for assessing any issues or problems from the end of customers and clients. ITIL structures any problems as the convenient issues regarding the approaches and matters that is raised by the customers. There are several aspects that may be introduces the vehicle breakdown services that needs the assistance of helpdesks related to any concerned organizations (Iden Eikebrokk, 2014). Among all of these vehicle breakdown cases, two most effective and breakdowns are towing of vehicles and change of flat tire. These two are the most effective and incidents that needs the assistance of the helpdesk to encounter the problems and provide the solutions to the customers in order to reduce their problems and make them comfortable within that situation (Esteves Alves, 2013). All of these two problems and issues affect the consumers convenience within that problematic situation. According to Chan, Geng Chen (1991), all of these issues may be resolved by designing the technical helpdesk with respect to the mentioned aspects and rules presented within the paper. The concerned organization should make a strategic plan for improving their technical assistance services to their customers in order to achieve the customer satisfaction and effectiveness from the end of the employees (Schwalbe, 2015). This aspect only can increase the efficiency of the IT helpdesk and resolve the problems of the customers in order to maintain customer satisfaction and improve company positioning within the competitive market. References Chan, C., Geng, L. Chen, L. (1999, May 9). Development of an Intelligent Case-Based System for HelpDesk Operations. Paper presented at 1999 IEEE Canadian Conference on Electrical and Computer Engineering. Alberta, Canada. DOI: 10.1109/CCECE.1999. Chapman, R. K. (2015, November). Re-Inventing the Helpdesk. Again. In Five Weeks or Less. InProceedings of the 2015 ACM Annual Conference on SIGUCCS(pp. 109-112). ACM. Esteves, R., Alves, P. (2013). Implementation of an information technology infrastructure library processthe resistance to change.Procedia Technology,9, 505-510. Iden, J., Eikebrokk, T. R. (2014). Exploring the relationship between information technology infrastructure library and process management: theory development and empirical testing.Knowledge and Process Management,21(4), 292-306. Nurfaizah, N., Utami, E., Arief, M. R. (2015). RANCANGAN INFORMATION TECHNOLOGY SERVICE MANAGEMENT MENGGUNAKAN INFORMATION TECHNOLOGY INFRASTRUCTURE LIBRARY (Studi Kasus: STMIK AMIKOM Purwokerto).Telematika,8(2). Ramakrishnan, A. (2014). Benefits of Adopting Information Technology Infrastructure Library (ITIL).Journal of Management Research,14(3), 159-168. Schwalbe, K. (2015).Information technology project management. Cengage Learning. Shafie, F., Yusoff, W. Z. W., Martin, D., Pawi, S., Ibrahim, I. S., Pauzi, N. F., Ismail, N. (2012). Facilities Management (FM) Helpdesk: User Complaint System in Higher Educational Institutions in Malaysia.Social Science Letters,2(1), 47.

The Credit Rating Agencies, Their Role in the Financial Crisis and What Is Next free essay sample

I would also like to thank Northeastern University for allowing me to discover a new culture and a different educating system. It also had a tremendous role in my future accomplishment and professional career. In addition, I would like to thank all the professors I had during these four years of studying, whether it is at CESEM or at Northeastern University. They made this journey even more profitable and enjoyable. I would also like to thank David Menival, my thesis supervisor, who accepted to work with me on this project. Finally, I would like to thank my parents for always supporting my choices and being next to me when I needed them. They have been my guides and models in life and have always encouraged me to be better and push myself. Table of Content Introduction4 I. Credit Rating Agencies: Role and methods5 1) History5 2) Role and methods7 3) The Issuer-Payer model 9 II. We will write a custom essay sample on The Credit Rating Agencies, Their Role in the Financial Crisis and What Is Next? or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? 12 1) Background of the financial Crisis12 2) Credit Rating Agency are not fully responsible†¦ 14 ) †¦But they could have done better17 III. What is next? 20 1) Lessons learned from the crisis 20 2) Regularization of the existing Credit Rating system 21 3) A new rating system23 4) Creation of new Credit Rating Agency24 Conclusion26 Exhibits27 Bibliography32 Introduction A credit rating agency is a company whose role is to evaluate the default risk of a borrower, whether it is a private or public company or a State. Since 1909, when Moody’s emitted its first rating, the role of the Credit Rating Agencies has considerably evolved and the methods used have improved. Even though their ratings do not constitute buying or selling recommendations, they rapidly gained an almost â€Å"biblical authority†. Since the 1980’s, the credit rating agencies have, indeed, become a reference for investors that want to determine the creditworthiness of an entity. Their ratings influence investors’ behaviors and they are indirectly involved in the future of a State or company. After several economic meltdowns and the recent financial crisis, the three big Credit Rating Agencies have been the center of attention. Is their methodology appropriate to evaluate the creditworthiness of an entity? Does the issuer-payer model insure the best transparence? Their role and implications in the crisis have been meticulously examined and their functioning system has been questioned. Although their role in the crisis in undeniable, are the only responsible of the crisis? The system was defaulting and the predictions of the credit rating agencies turned out to be wrong. Which modifications should we bring to the system to make it more transparent and efficient? These are the questions we will try to answer throughout this thesis. I. Credit ratings agencies: role and methods Credit Ratings agencies, entity still little known outside the financial communities two years ago, found themselves at the center of attention with the subprime crisis. If everyone more or less gets, now, familiar with what a credit rating agency is, people usually do not know what are the origins of this business, its rationale and its financing model. 1) History The influence of the three main credit rating agencies (Moody’s, Standard amp; Poor’s and Fitch Ratings) was build step by step since their inception, in the early 1900’s. Historically, the ratings issued by the agencies did not have more value than the ones given by analysts or economic experts. They acquired this particular status when legislators and regulators attributed them a bigger place in their systems. The development of railroads companies marked the origin of these â€Å"Big Three†. These railroad companies were indeed fluctuating and needed nvestments to set up their infrastructures. As investors were concerned and questioned their capacity to reimburse their debts, Henry Varnum Poor published, in 1860, some financial information regarding the creditworthiness of those companies in order to help investors make their decision. Later on, in 1900, John Moody would also start publishing economic data on these companies and finally, in 1909, J. Moo dy gave his first ratings about railroad companies in â€Å"Moodys Analyses of Railroad Investments by attributing a letter to each of them; the credit rating was born. This system was progressively adopted by others credit rating agencies such as Fitch Publishing Company, founded in 1913 by John Knowles Fitch, which would later be known as Fitch Ratings. Finally, Less than thirty years later, the credit rating agency Standard amp; Poor’s is created after the merger of the Standard’s Statistic Bureau and the Poor’s Publishing Company. The development of the ratings is stimulated by several factors. First, its goal is to offer a service for investors by providing useful information that will help them in their decision-making process. In addition, the relative large size of the American territory discourage investors to search for information, they would rather pay for it than waste time looking for it. Moreover, the repercussions of the 1929 financial crisis and the consequences of the World War II, giving supremacy to the Economy of the United States, also favored the expansion of the concept of rating. In 1970, after the bankruptcy of Penn Central Railroad, the first doubts regarding the independence of the credit rating agencies appeared. This was the first time that the reliability and seriousness of the ratings were questioned. In order to reestablish the value of the ratings, the SEC (Securities Exchange Commission) created, in 1975, the â€Å"Nationally Recognized Statistical Rating Organization† (NRSRO) designation. The goal was to standardize and formalize the ratings regarding brokerage firms and banks with their capital ratios. At that time, seven agencies obtained the NRSRO designation. In 1990, after several new mergers, the number of NRSRO was only of three: Moody’s investor service, Standard and Poor’s and Fitch Ratings. In 2003, the Canadian agency Dominion Bond Ratings service Ltd also ained the status of NRSRO, followed by A. M Best Company in 2005. In June 2003, after the disorders caused by the bankruptcy of the company Enron, the regulation of the credit rating agencies and their NRSRO status needed to be examined. Multiple reports on the role played by the agencies in this case were published. Even though investors lost faith in them, they all agreed that they should ke ep the NRSRO status. In 2006, after years of critics toward the credit rating agencies, the functioning rules of the NRSROs were modified and the Credit Rating Agency Reform Act was promulgated. The objective was to regulate the internal decision process of the credit rating agencies while forbidding the SEC to control the rating system of NRSROs. Right after, in 2007, three more companies were added to the list of NRSROs: Japan Credit Rating Ltd, Rating amp; Investment Information Inc. and Egan-Jones Rating Company. Since April 2011, the list of agencies that received the NRSRO status counts ten names (See Exhibit 1, page 27). Finally, in July 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act reinforced the control over the ratings’ practices. This included a reduction of the conflicts of interest regarding the ratings of structured products and decreased dependence on ratings. It also allowed investors to sue a credit rating agency in case of fake or reckless rating. For decades, the three main agencies, Moody’s, Standard and Poor’s and Fitch Ratings, have been controlling the market, as high barriers to enter exist. The major ones are the importance of the reputation and the investors’ confidence in their ratings. Since their creation, these agencies have distinguished themselves with a particular role and specific methods. ) Role and Methods The Credit Rating Agencies evaluate the creditworthiness of debtors. Ratings can concern a company as well as a particular emission or securitization or any financial debt. They are usually solicited by the debt issuer but can also be attributed, if non-requested, after collecting public information. Credit Rating Agencies enjoyed a good reputation and an essent ial role in the financing of economies. Over time, regulators, for practical reasons, tried more and more to impose the use of the notation in the investors’ financing. This long-term trend follows upon the systematic financing by the market, whether it is in a simple formulation taking the shape of debenture or assimilated loans or new products where the risk of defect is difficult to comprehend because it is diffuse in complex financing methods such as the securitizations. Credit Rating Agencies have the role of processing the information for financial markets. They synthesize the information for market needs and the investors seemed to excessively grant their confidence to this information. Investors pay close attention to any modifications in ratings or to any entities placed â€Å"under observation†. The ratings issued by the credit rating agencies have a trustworthy value. Since investors usually do not take the time to look for information regarding a company or a State, they based their investment choices upon the rating given by the credit rating agencies. Therefore, the role of the credit rating agencies is essential. Basically, these agencies summarize all information available about a company or State and turn it into a rating that will then influence the future of an entity. However, it is necessary to underline that the ratings given are not buying or selling recommendations, they are only an evaluation of the creditworthiness of an entity, at a defined time, and statically calculated. Next to this informative participation, credit rating agencies contribute to the management of portfolios by giving advice to the investors via the medium-term orientations emitted with the rating. If a company tries to finance itself, the received grading will be determining for the conditions of the operation. Whether it is by financing through banks or by issuing bonds on the market, the more the grade will be raised, the more the company will be able to find cheap funds at low interest rates. On the other hand, a bad grade will imply higher interest rates and difficulties to find financing. The difference of levels between both interest rates will constitute the risk premium. This problem becomes particularly important for companies or States located within the â€Å"speculative† category. Major institutional investors do not want, indeed, to take the risk and, therefore, do not invest on these kinds of values. However, the rating is ot fixed and fluctuates throughout the life of the bonds. A decrease of the rating can lower the price of the bond. Likewise, a raise of the rating can be associated to an increased price of the bond. In order to correctly determine the default risk, Credit Rating Agencies use diverse quantitative and qualitative criteria that they translate into a gr ade. Credit Rating Agencies distinguish two types of ratings: short and long-term; the traditional rating that applies to loans emitted on the market and the reference rating that measures the risk of counterparty for the investor represented by this issuer. When evaluating the financial risk, credit rating agencies first take into consideration purely financial numbers such as the profitability, the return on investment, the level of cash flows and debt, the financial flexibility and the liquidity. More and more, the agencies integrate non-quantitative elements such as the governance, the social responsibility of the company and its strategy. It is also necessary to highlight the fact that the rating is usually associated with medium-term orientation, allowing to better estimate the future trend regarding the quality of the issuer. In some cases, a borrower can be placed â€Å"under observation†. The main steps in a company’s life (mergers, acquisitions, big investments†¦) are indeed, likely to influence and modify their structure. Credit rating agencies, subject to preserving the confidentiality of the received information and avoiding cases of insider trading, can have insider information on the financial state and the future prospects of the analyzed issuer, while reducing the cost of collection and data processing. They distinguish themselves from financial analysts, who, in principle, only have access to the public information. Even if they can benefit from insider information on behalf of issuers, they are dependent on the information provided by these issuers. Each Credit Rating Agency possesses its own rating system. In broad outline, grades are established from A to D with intermediary levels. Thus, the best grade is AAA, then AA and A for Standard and Poor’s or Aa, A, etc. for Moody’s. In addition, we can also find intermediate ratings; a â€Å"+† or a â€Å"-â€Å" but also a â€Å"1† or a â€Å"2† can indeed be added to the grade (e. g. AA+, A-, Aa2, etc. ). This allows a better and more precise classification of borrowers. These different ratings can be divided in two groups: the first category, â€Å"High Grade† includes all ratings between AAA and BBB and the second category, also known as â€Å"speculative†, for inferior grades. (See Exhibit 2, page 28) The biggest advantage of this system is to provide information at low costs for potential investors. Thanks to an easily understandable grade, but incorporating a vast amount of information, investors can quickly have an idea of the creditworthiness of a borrower. The ratings issued by these agencies are a more and more useful tool in the decision-making process of investors looking for relevant information. Current regulation obliges them to certify published information. As we have previously seen with the United States or Greece, the market strongly reacts and sometimes irrationally to any modification of a rating or to a simple announcement of a hypothetical revision. Credit Rating agencies have a real influence on markets. The impact of their decision on issuers and investors is decisive. On the contrary, an excessive reaction was completely predictable in front of their incapacity to forecast the financial crises of these last decades. 3) The issuer-payer model For more than half a century, investors that paid to obtain financial information about loan issuers financed the credit rating agencies. Thus, companies, local communities, States were given a rating, without asking for one or without their consents, but to answer to requests from bankers or investors that were holding these funds. Naturally, these â€Å"non-requested† ratings were only based on public information concerning such or such company. The Credit Rating Agencies sold their publications to bankers and capital holders who were looking for potential adequate investments. In addition to selling these â€Å"manuals†, the credit rating agencies could also offer others services to investors (weekly information about financial results of rated companies, actualization of the ratings, recommendations and advices of purchase and/or sell). However, the agencies will lose some profits as some investors managed to have the information and the manuals without paying for them. As from the beginning of the 1970s, Credit Rating Agencies started to charge their services to the issuers of bonded debt. This is the issuer-payer model. These issuers of debt (Companies or communities looking for investment) began to more and more directly solicit the agencies in order to obtain a rating. They believed that this rating would reassure investors during a slowdown of economic growth. Thus, from now on, it is more often the issuers of debts that will request a rating from the credit rating agencies to get an evaluation from them that would allow them to access to credit. This approach contributed widely to consolidate the place of the Credit Rating agencies and to legitimize their intervention. In fact, this translates well a swing of the balance of power between those who look for funds to invest in industrial projects and those who hold funds, while waiting for the best yield at the slightest risk. In a world highly regulated by finance, where pensioners and holders of capital are in a strong position, and where industrial and direct investors are in a position of requestors, it is now, more often, issuers who wish to borrow and will ask to be noted, that will pay the credit rating agencies for their services. This shift from an investor-payer model to an issuer-payer model compromised the independence of the credit rating agencies. In fact, in 2011, only 10% of the revenue of the agencies came from funds’ holders who wanted to know more about the validity, the risk and the potential profitability of an investment. From now on, the ones looking for capital are the ones financing 90% the credit rating agencies. The issuer-payer model strongly modifies the situation of the credit rating agencies. In this situation, the rating agency is used, and paid, by the market player who wishes to be noted to then be able to hope to obtain capital on financial markets. The question of the independence of the agency in its rating process is then very directly put: the rating agency will be inclined to note well a company which pays her to then try to obtain capital in good conditions on behalf of miscellaneous investors. However, the market has faith in this independence since a credit rating agency has to protect its reputation, and thus an agency could not take the risk of over evaluating one of its customers by fear of losing its credibility and thus all business. Credit Rating Agencies seem, indeed, more and more subjected to conflicts of interests, which decrease their reliability. The issuers pay the agencies to be noted, while credit rating agencies need the revenues from these same issuers. Besides, more and more often, the credit rating agencies mix two activities: consulting and rating. Therefore, in addition to evaluating a company, an agency also advises on current operations. A study for the SEC in 2008 revealed that some analysts from certain agencies participated in meetings between investors and issuers in which commission and rating were fixed. These conflict of interest generated criticisms and accusations against credit rating agencies and especially during the recent financial crisis. As the credit rating agencies were essential and indispensable to any players on the market that wanted either to invest or to find capital, they were at the heart of the upheaval. II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? In order to determine the responsibility that the credit rating agencies have in the financial crisis of 2008, it is necessary to understand how the crisis happened, which events punctuated it and what has been the behavior of the rating agencies throughout the crisis. 1) Background of the Financial Crisis Everything started when the American housing market suddenly collapsed after a steady rise in the 2000 years. To finance their consumption and acquisition of a house, American households did not hesitate to get into very high debts. The market was booming so there was a trust in the ability to get its money back with a substantial profit. As counterparty, they pawn their properties. This was a guaranty for banks to be paid because if the borrower could not reimburse what he owed, his property would be sold to honor his debt. When the phenomenon grows and affects a large number of households, the sale of their property causes the collapse of the value of the property. The downturn of the housing market was reinforced by the subprime system. Since 2002, the American Federal Reserve, which encouraged easy credit to boost the economy, allowed millions of households to become homeowners thanks to premium loans called subprime, with variable interest rates that can reach 18% after three years. These interest rates are fixed according to the value of the property; the greater the value, the lower the rate and vice versa. That is what happened when the housing market collapsed in the United States in the beginning of 2007. Households, lacking of ways to reimburse their debts to lenders, have caused the bankruptcy of several credit institutions that could not repay themselves since even when taking on the property, this one has a lower value than initially. Finally, banks were also touched by this phenomenon. They have indeed been numerous to invest in these lending institutions. Nevertheless, today, invested funds are gone. In order to compensate these losses on the housing market, banks were forced to sell their shares, leading to a decrease of their values on the financial markets. The crisis quickly expanded in Europe, where major European banks such as Dexia in France and Benelux or IKB in Germany lost a fair part of their investments. Besides, the bankruptcy of several European banks led to a confidence crisis on European financial markets. Banks have doubts about each other’s contamination by the subprime crisis and therefore, to be cautious, refused to lend money. Since international banks are linked to each other through financial agreements, the crisis rapidly extended, to reach Asia during the summer 2007. Only one solution seemed conceivable for banking institutions to face this lack of liquidity: sell their shares and bonds. This fast and quick intervention caused a sharp drop in stock value and all the European stock markets were affected (See Exhibits 3 and 4, page 29-30). In order to appease the crisis on the markets but also to bail out banks, the American Federal Reserve (FED) and the Central European Bank (CEB) decided to inject liquidity in the monetary system, hoping to gain back the confidence of investors to help stabilize the situation. On 9 August 2007, the CEB acted first by making available 94. 8 billion euros to banks, followed shortly by the FED which injected $24 billion to appease the spirits of investors. However, markets initially misinterpreted the message, considering their involvement as a sign of weakness. The next day, the CEB injected again 61 billion euros and the FED, $35 billion, but the markets felt down again. Finally, on August 13, 2007, the same action was repeated and the monetary market as well as stock markets around the world kept their heads above water. While it seemed like the financial crisis was faded away at the end of 2007, a second wave of crisis appeared from the banking sector at the beginning of 2008. This was due to the creation of new products such as residential mortgage-backed securities (RMBS), Asset-backed Securities (ABS). In fact, credit risk, such as subprime mortgages, were pooled and backed by other assets, more or less risky, in Collateralized Debt Obligations (CDO) (See Exhibit 5, pages 31). These clusters of scattered debts were then sold on the stock exchange by the issuer, like shares of a company could be given up. This results in the transfer of the risk of non-payment from issuers of mortgages to financial institutions: in particular banks, major consumers of CDO. In order to invest on the CDO market, some financial organisms went even further and created Structured Investment Vehicles (SIV) that did not have to respect the usual rules of prudence of the banking system. This amplified the risks taken and losses impacted on the performance of the bank. Other new products were also created such as Credit Default Swap (CDS), an insurance contract between two entities against a risk faced by one of two entities, such as the non-payment of a debt. The price of the CDS reflects the confidence in a particular issuer of a debt and is the basis for determining the value of the product of the debt. The crisis took a new dimension on September 15, 2008 with the bankruptcy of Lehman Brothers and AIG (narrowly saved by the Fed), as well as several American and European banks (HBOS in United Kingdom, Fortis in Europe, Dexia in France and Belgium, etc. ). This international and financial crisis still has repercussions on today’s stock markets and the end of the tunnel seems far away. The question raised here is the role played by the Credit Rating agencies in the crisis. Are they the only ones to blame for everything that happened? Are the actions intended by the rating agencies responsible for the crisis? 2) The credit Rating Agencies are not fully responsible†¦ Ever since the crisis, the credit rating agencies have been easy targets to blame for what happened in 2007 and the years after. Effectively they did not anticipate the downturn of the market, they continued to attribute good rating to banking institutions already hurt by the crisis with an increasing book of bad loans or bad papers that banks will have to deleverage. Many criticisms have been emitted about toward them. However, it is important to point out that they are not the ones and only responsible for what happened. They did not have power over a lot of factors that went wrong, and for that they cannot be the only to take the fault in the financial crisis. The thermometer could not be responsible for the fever. First of all, they are not responsible for the bankers or mortgage brokers who gave loans unwisely. These institutions lacked of common sense and thinking when offering credits. Banks and managers perfectly knew that unemployed borrowers would never be able to reimburse their mortgages. They have, indeed, disproportionately opened the gates of credit by taking for guarantee, when they did take some, the increase of real estate prices or their trust in the growth of the economy. They thought that they could make benefits if the debtor did not pay, as they believed that they could force the sale of the house for a higher price. However, real estate prices always end up going down and the economy is fluctuating. In an attempt to reduce the risk of these new kinds of loans, banks used securitization; they transformed these loans and resold them on the stock market. Therefore, mortgages securitizers are also to blame. Some companies such as Washington Mutual, Morgan Stanley or Bank of America were mortgages originators as well as mortgage securitizers, other like Goldman Sachs, Lehman Brothers and Bears Stearns bought mortgages directly to subprime lenders and pooled them together to resell them to investors. However, as soon as a debtor was not able to pay back his mortgages, the security became toxic and had no more value. Nevertheless, this was not the last step. Some banks would buy and bundled mortgage backed-securities into collateralized debt obligations, composed of different levels of risk. The creators of these new financial products are also responsible for the crisis. They bet against these risky CDOs by using credit default swap. (See exhibit 5) Government Sponsored Enterprises (GSEs) could also be blame for what happened. They indeed, control the mortgage market. When a bank or a mortgage broker wanted to take off his books a loan, it could sell it to a GSE, which led to a higher number of mortgages. Fannie Mae and Freddie Mac are the two major GSEs. Alone, they own or guarantee half of the current mortgages. With their â€Å"government status†, investors can buy those bonds while asking for a low interest rate in return, as federal government bonds have the safest credit rating in the world. As long as debtors paid back their mortgages, Fannie Mae and Freddie Mac would be able to pay their creditors too. However, as these loans where often given out, even to people we knew could not reimburse, GSEs had to assume the risk. Therefore, we could also say that investors could be blamed for the role they played. They bought and invest in financial products they did not know about. They should have conducted researches about what they were purchasing and should have known these were subprime and meant a higher risk of non-payment. However, we have to see the bigger picture. At that time, banks received pressure from higher instances to encourage homeownership and so, to grant loans to the poorest population. The government wanted households with a less comfortable life to be able to buy their own house. The pressure that was put on the banks â€Å"forced† them to give mortgages to debtors that would ikely not pay back. This being said, borrowers are also responsible for contracting loans that they pertinently knew they could not afford. Moreover, the credit rating agencies are also not responsible for the debt of the countries. They have often been accused to do be the reason for the deficit of some countries such as Greece. Nevertheless, Greece has always had a huge deficit. They neve r had a break-even budget in 150 years, and governments from left to right parties systematically laid about the finance of the country. In addition, the national sport is not the Greco/Roman wrestling or the Marathon but how to avoid paying taxes; nothing in which the rating agencies were involved. Furthermore, regulators could have also done a better job to prevent the crisis. In the United States, several regulators exist and each of them has a specific area of expertise. The regulation of the banking sector is shared between the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (which guarantees the deposits of bank customers) and the Office of the Thrift Supervision (OTS). There is also The Securities and Exchange Commission (SEC) that is responsible for the supervision of stock exchanges. The Financial Industry Regulatory Authority provides the regulation of brokerage activities. Finally, the Commodity Futures Trading Commission (CFTC) insures the regulation of futures and options markets. This various regulators could have acted to appease the situation. The SEC could have, indeed, regulate lending practices at banks and force them to keep more capital reserves in case of losses. The Federal Reserve could have contained the housing bubble by setting safer mortgages lending standards, which it failed to do and especially when Alan Greenspan who was the head of the FED, refused to improve the examination of the subprime mortgage market. Finally, according to the Financial Crisis Inquiry Report, executives in the main investment banks did not hold enough capital to be fully protected against losses. Some companies, such as Lehman brothers or Citigroup would just hide bad investments off their books. It is mainly a problem related to the liquidity crisis that led to the bankruptcy of Lehman Brothers. Lehman Brothers, indeed, financed itself on the short-term and lend on the long-term. When the source of the financing dried up (banks did not trust each others by fear of not being paid off), Lehman found himself stuck and was enabled to face its commitments. If the credit rating agencies were not responsible for the mortgage originators or securitizers, the creation of the CDO, the regulators or the executives of the investment banks, they surely played a tremendous role in the crisis ) †¦But they could have done better The credit rating agencies are responsible for a lot in the financial crisis. Several aspects of their business as well as the actions they have done have been pointed out as the main cause of the crisis. First of all, the pertinence of their business model was questioned, among others the oligopolistic situation of the market and the conflict of interest creat ed by the issuer-payer model. The â€Å"Big Three† (Standard amp; Poor’s, Moody’s and Fitch Ratings) generate 95% of the $6 billion market that the rating business represents. These three agencies dominate the market and adopt similar methodologies and practices. The business model of the rating agencies establishes itself on the independence and the credibility granted by the financial markets and the authorities of supervision. That is why, in the absence of statutory reforms and / or of the desertion of numerous customers, the leadership of the â€Å"Big Three† will be maintained, protected by strong barriers of entry (reforms difficult to set up and loyalty of issuers often connected to the heaviness of the rating process). Besides, the oligopolistic situation is strengthened by a consolidation, on the initiative and thus for the benefit of the â€Å"Big Three†. So, Fitch acquired in June 2000 the fourth American rating agency, Duff and Phelps, and in December 2000 Thomson BankWatch. At the beginning of 2006, Fimalac gave up 20 % of Fitch Group (who, herself, holds Fitch Ratings, Fitch Training and Algorithmics, this last company having been acquired in 2005) to Hearst Corporation. Likewise, the French subsidiary of Standard amp; Poor’s acquired ADEF (Agency of Financial Evaluation). Another reason why the credit rating agencies played an important role in the financial crisis is because of the conflicts of interest they were facing with the issuers. If some say that these conflicts of interest were of minor importance since there are always conflicts of interest in relationships, in that case, it had serious consequences on the global economy, as they are one of the causes of the subprime crisis in 2008. It is, indeed, the issuer that pays the rating agency so that this one estimates its capacity to pay off its debt. It is thus relevant to wonder about the partiality and the objectivity of the rating agencies which find themselves at the same time judge and judged and which can be inclined to note well its customers to keep their market share. Besides, the transparency that the rating agencies show in their methodologies and during their changes of ratings is unreliable as far as these sudden reversals seemed to have destabilized the markets. The three major credit rating agencies also contribute to worsen the financial crisis by their practices. They were, indeed, a key factor in the financial meltdown. They attributed a rating to every products offered on the stock market. Even mortgage-related securities received a good grade, which made it easier to market and sell them. As we have seen previously, the ratings that they gave had an almost â€Å"biblical authority†, so investors trusted the rating agencies to be fair and to give relevant grade to each product and did not conduct further investigation regarding their investment. Credit Rating Agencies were necessary to the mortgage-backed securities market; each actor in the process needed them: The issuers, to approve the structure of their deal The banks, to determine what capital to hold The investors, to know what to buy Since 1970, when the credit rating agencies got the status of NRSRO, the SEC decided to base the capital requirements for banks on the grades given by the rating agencies. This is also included into the banking capital regulations as the recourse rule, which allows banks to hold less capital for higher -rated securities. The SEC also prevented money market funds to buy securities that did not receive ratings from at least two NRSROs. Without these good ratings, banks would not have been able to place these financial products so easily onto financial markets, and the investors would have never bought them. Theirs ratings helped the market to go up rapidly and their downgrades between 2007 and 2008 wreaked havoc across markets and firms. These ratings, especially the ones for the mortgage-backed securities, appeared to have been very optimistic. But what we could observe, throughout the crisis, is the gregarious reflex of the credit rating agencies. They usually agreed on the ratings and when one of them downgraded a security, a company or even a State, the others would usually follow and did the same thing. As we have seen, the Credit Rating Agencies have indeed played an important role in the financial crisis. However, they are not the only one to blame. Thus, we can say that the thermometer is not responsible for the crisis but it could have given a better temperature of the situation. III. What is next? As we discussed, the credit rating agencies have been criticized a lot during the crisis and some flaws of them have been pointed out. In order to improve their efficiency, it is important to understand what we have learned from the crisis and then propose a better regulation or an alternative to the Big Three. 1) Lessons learned from the Financial Crisis The first lesson learned from the crisis is the impact of the globalization of financial markets. This has linked countries together in a greater extent than they were before. That is why, in today’s economy, any crisis that hits a main country or group of countries will have repercussion on all other countries. The financial crisis of 2008, started in the United States with the subprime bubble. Then it grew bigger and affected the rest of the world almost immediately compared to the 1929 crisis which also had worldwide impact but more gradually. We have to keep into consideration this new factor and realize that globalization plays an important role in the current worldwide economy. In addition, a country and its financial system need to be better prepared to face the crisis, in order to limit economic and financial damages. This means having a sound and well-regulated environment, keeping its inflation rate low, its exchange rate flexible, and its debt position sustainable. By doing that, a country would limit its vulnerability in front of any financial crisis. Moreover, the country should use fiscal and monetary policies to be able react quickly in case of external shocks. Another lesson learned is the question of the financial supervision. The global crisis is a crisis of confidence, which must impose rules on investment in the financial market, such as CDS (Credit Default Swaps) and short-selling of securities, clearing of OTC derivatives to reduce risks, CSD (Central settlement and Depository) regulation to protect investors and also Hedge Funds transparency. In macroeconomics, monitoring means imposing laws and rules on a structure with what is called the invisible hand. In our case, the invisible hand is the World Bank and the International Monetary Fund and the States, which have full power to intervene and better regulate transactions in the financial markets. This crisis also revealed some weaknesses regarding risk planning. Research based on various methods, including country case studies, confirmed that the more the planning is important, the more the quality of the financial services of a country is raised and more the financial intermediation is efficient. The planning of the risks led a certain number of countries to revise their financial structures to adapt itself to the global economic transformations. Finally, we can say that every good thing comes to an end, positive times do not last forever and the end is most likely going to be painful. In today’s financial system and global economy, we cannot avoid financial crisis, we can just hope that enough efforts will be done to improve our financial system and to limit the impacts of future crisis on our economy. If we focus on Credit Rating Agencies, to have a sound environment, it is worth considering a better regularization of our existing Credit Rating system, a new and improved rating system or the promotion of totally new credit rating agencies. 2) Regularization of our existing Credit rating system After the dysfunction of our system translated for instance into the collapse of Lehman Brothers, the disappearance of famous institutions such as Bear Sterns or Merrill Lynch, G7 members stressed the financial industry to improve its functioning mode and enhance the regulation. Several critics have indeed been directed to the credit rating agencies regarding the methodologies used by those agencies (including the growing place of the so-called political factors), the lack of transparency of their decisions, the rudimentary explanation accompanying the changes in notation, the moments selected to realize their announcements of ratings and finally, the potential conflicts of interest. All these aspects need to be taken into consideration when aiming to regulate the rating agencies. Various reform proposals have been recommended. Among them, you find some proposing the suppression of the government’s influence over this industry, or even the creation of a completely government-sponsored rating entity. However, the final goal is the accuracy of the credit rating. The first main step toward a better regulation happened in 2006, when a new section to the Securities Exchange Act has been added. The objective was to â€Å"improve rating quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating industry† (ANNUAL SEC REPORT, supra note 22, at 16). The market is an oligopoly; the Big Three set the tone for the rest of the industry. Encouraging competition should give more choices to investors, at a lower cost and with better quality ratings. Several rules were added along the way, especially in 2009, when the SEC’s new rule addressed conflicts of interest, fostered competition and required detailed disclosure. For example, a NRSRO could not anymore issue a rating in which it had advised the bank or the issuer for the structure of the product. Another change emerged from the Dodd-Frank Act, in 2010, where a whole chapter has been dedicated to the rating agencies: â€Å"improvements to the regulation of the Credit Rating Agencies†. The Dodd-Frank Act qualified the agencies as â€Å"gatekeepers† for the debt market and that is why they needed â€Å"public oversight and accountability†. This meant reducing the investors’ reliance on ratings by limiting references to NRSRO ratings from rules, increasing the liability exposure, maintaining and informing on the structure of the ratings, as well as filing control reports yearly. However, both of these new reforms showed weaknesses, particularly in addressing the conflicts interest coming from the issuer-payer model, or the oligopoly. As mentioned before, several proposals would appear more efficient to answer these problems. The first proposal would be the elimination of the NRSRO status, which would remove any regulatory reliance on the ratings. This would also drive prices down as there would be an increasing competition, but it would also improve the rating quality and the innovation. Nevertheless, this proposal would lead to a total revision of the entire bank regulatory system and could also increase the pressure to satisfy issuers. The second proposal was to create a totally government-sponsored rating industry. This would make the rating a public good, eliminating any conflicts of interest due to the issuer-payer model. Although appealing because it resolves one of the main critics emitted during the financial crisis, it does not say who is going to pay for the subsidization. Finally, another more recent proposal called â€Å"disclose or disgorge† asks for the agencies to disclose the quality of the ratings they give, which means disclose to the public when a rating is â€Å"low quality† or disgorge benefits made with the rating. However, charging penalties would increase the barriers of entry on this market and discourage potential NRSROs. The rating business faces two major problems, the oligopolistic situation of the market that is being maintained by an increased regulation that secures the Big Three, and the issuer-payer model that fosters the conflicts of interest. Even though several reform proposals have been suggested, none appears to be totally conceivable. 3) A new rating system We have seen that a lot of reform proposals exist in order to enhance and increase regulation of the rating system. These proposals, indeed, reveal that some aspects of this business need to be improved. Eventually, a new rating system is worth considering. First of all, we have realized already touch based, throughout this analysis that the business model of the credit rating agencies needs to be modified, especially the issuer-payer model. The fact that the issuer is the one that pay the agencies for their ratings creates a conflict of interest that has to go away to insure an accurate and objective rating. In order to solve this issue, a new model is necessary. A possible idea to get there would be to make, not the issuer, but the investors (the ones that want to know the rating of a company or an entity) to finance the credit rating agencies. It is indeed them that need to know the rating of an entity, so it would be fair for them to pay in order to know what they are investing in. This would solved the problems related to the conflict of interest as rating agencies will not be tempted to give a good grade just to satisfy the client and avoid loosing profits. This was actually the model that existed before 1970, when the issuer-payer model was established. The shift to a model investor-payer would constitute a deep change for the whole rating industry but would eliminate the conflicts of interest. Another change that would be conceivable would be to set up a â€Å"rating planning†. The credit rating agencies should emit their grading at a known rhythm. Therefore, companies or States would know when they would be rated. For example, every January 1st, they could give their ratings for all entities. This would avoid sudden downgrades as we saw during the crisis, where rating agencies lowered the rating of a company right before it went bankrupt. Furthermore, to improve the accuracy of the ratings, a distinction between the rating of a company and a State should be made. In fact, Credit rating agencies do not evaluate the same thing when rating a country or a firm. That is why different ratings should be given according to the nature of the entity. Finally, this new rating system should have a better transparency of ratings. As this has often been reproach to the agencies, it is clear that we need to improve it. In order to get more transparency in the ratings, the credit rating agencies should be forced to make public some criteria that contributed to the rating process. In addition, when an entity is downgraded, there is ever a clear explanation. An explicit and standard comment should go along with the new ratings to explain the cause of the downgrade or upgrade. All these improvements should be made to obtain a more transparent and accurate rating. These changes could lead to more efficient and regular ratings where conflicts of interest would be inexistent and where the distinction between entities would improve the relevance of the ratings. 4) Creation of a new credit rating agency Finally, another solution that arises would be the creation of a new rating agency. This proposition is particularly discussed in Europe. The arguments called in favor of the creation of a European rating agency are multiple. It would be a question, first of all, of introducing more competition into a sector that is today dominated by three major actors. Standard and Poors, Moody’s and Fitch Ratings are indeed sharing more than 90 % of the market, a situation which confers to the members of this Big Three a tremendous capacity of influence. To create a new rating agency would be a way of having a bigger diversity of points of view. The trust that would be granted by the investors to a new European agency would depend however on its capacity to avoid the criticism sent to Big Three in terms of independence and conflict of interest. It would also be necessary to specify the status of the new agency: a public or a private organization? A public rating agency could face the mistrust of the investors, who could doubt its independence towards public authorities and States, which it would have the mission to evaluate. On the other hand, a private agency would look like a non-profit foundation. The rating agency would be financed by the investors who would use its notations, and not by the entities emitting the financial products, which would allow guaranteeing its independence. Nevertheless, the future prospects of such a structure remain uncertain: to what extent would it be able to impose itself in front of Big Three, in a sector where the experience and the reputation of the institution play a determining role? In addition, a history of ratings would be necessary to evaluate the evolution of an entity and a strict method is mandatory for accurate rating. A new rating agency would not be able to have all of these factors before several years. To conclude, it is not easy to find the best solution to improve the current rating methods. Different regulations have been tried, all presenting good points but also flaws. However, what we need to enhance is clear: better transparency, a more accurate rating and a suppression of the conflicts of interest. Conclusion The role of the credit rating agencies in today’s economy is crucial. They evaluate the creditworthiness of an entity, influencing investors and interest rates. However, during the crisis, their role has been criticized. Several factors can explain their controversial position. The oligopolistic situation of the market, their supposedly trustworthy evaluations given by their NRSRO status, as well as the conflicts of interest coming from their issuer-payer model are the main causes of the critics emitted toward them. Recently, the American justice even pressed charges against the rating agencies for their role in the crisis and asked for five billion dollars. Nevertheless, even if the credit rating agencies are the ideal responsible, they are not the only ones to blame. Now that the crisis revealed the different flaws of their system, we can only improve them going forward. Several regulations have already been approved and others are still under consideration. Other ideas to enhance the rating system include a new financing model, by perhaps considering going back to the investor-payer model, a better transparency of their rating, by showing the criteria used for their ratings, and a distinction between a company or a security and a State, which are two completely different entities. Lastly, we can wonder if the Credit Rating agencies still have as much influence as they used to. For instance, when downgrading both the United States and France, the repercussions were minors even nonexistent. The lost of their triple A did not bring the interest rates up as it should have, since today the interest rates are historically low in both these countries. Exhibits Exhibit 1 Credit Rating Agencies with the NRSRO designation Exhibits Exhibit 2 Rating systems of the Big Three Source: Credit rating Wikipedia, the free encyclopedia.   Wikipedia, the free encyclopedia. N. p. , 7 Mar. 2013. Web. 13 Mar. 2013. lt;http://en. wikipedia. org/wiki/Credit_ratinggt;. Exhibits Exhibit 3 – Important facts about the crisis Exhibits Exhibit 4 – Evolution of market indexes from August 9 to 16, 2007 Index| Evolution| Dax (Germany)| -4,42%| Dow Jones (USA)| -5,95%| Nasdaq (USA)| -6,16%| FTSE 100 (United Kingdom)|   8,37 %| CAC 40 (France)| -8,42%| Nikkei (Japan)| -10,3%| Exhibits Exhibit 5 – Residential Mortgage-backed securities These tranches were often purchased by CDOs These tranches were often purchased by CDOs Source: The financial crisis inquiry report: final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Official government ed. Washington, DC: Financial Crisis Inquiry Commission :, 2011. Print Bibliography * Dupuy, Claude . La crise financiere 2007-2008 Les raisons du desordre mondial C. francetv education la plateforme des parents, eleves et enseignants. N. p. , n. d. Web. 12 Mar. 2013. lt;http://education. francetv. fr/dossier/la-crise-financiere-2007-2008-o21596-chronologie-de-la-crise-2007-2008-780gt;. Gannon , Jack. Help the Credit Rating Agencies get it right. Annual review of Banking and Financial Law 31 (2012): 1015-1052. www. bu. edu. Web. 10 Mar. 2013. * Gedos, Jean-Guy, Oussama Ben Hmiden, and Jamel Henchiri. Les Agences de Notations Financieres, Naissance et evolution dun oligopole controverse. Revue Francaise de Gestion 227 (2012): 45-63. Print. * Goldberg, Adam. Credit Rating Agencies Triggered Financial Cris is, U. S. Congressional Report Finds.   The Huffington Post. TheHuffingtonPost. com, 13 Apr. 2011. Web. 12 Feb. 2013. * Gourgechon, Gerard. Les Agences de Notations. http://alternatives-economiques. fr. N. p. , 17 Jan. 2012. Web. 3 Mar. 2013. lt;http://alternatives-economiques. fr/blogs/gadrey/files/agences-de-notation26p. pdfgt;. * Krebs, Joshua. 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