EU and US developments in the regulation of credit rating agencies

Barnabas WB Reynolds, Lisa L Jacobs, Clifford Atkins, Robert Evans III and David J Beveridge, Shearman&Sterling LLP

The role played by credit rating agencies (CRAs) in the global economy has been under scrutiny on both sides of the Atlantic since the credit crunch took hold in the second half of 2007. Among other matters, governments and financial market regulators have been caught off guard by the sudden meltdown in the asset backed securities market and the fact that many of those securities that are currently illiquid, and in many cases performing at considerably less than full value, had solid investment grade ratings.