The Development of American Rating Agencies Driven by Rating-Dependent Regulations

摘要

There was a freely development of rating agencies since John Moodys, the first rating agency, was founded in 1909. This was broken up after Regulation H, the initiate of rating-dependent regulations, was issued in 1930, which was used by the Federal Reserve Banks on their membership government. Rating-dependent regulations effectively granted to rating agencies hundreds of valuable regulatory licenses after the sharply increase in the early 1970s. And it was the rating-dependent regulations, instead of the needs of capital market, that drove the rapid growth of main rating agencies, bringing them extraordinarily high profits. This also companied not only with the uncertainty of information value of rating, but also with the seriously unfair competition of rating industry and the persistent growth of economic risk.