Bond market liquidity fearsome
It is easy to see why shareholders pay so much attention to ratings agencies. Who else can provide them with such critical information? Taken chronologically, agency announcements are bond market liquidity fearsome priced in, then integrated by analysts into their forecasts and only then, into the opinions of rating agencies. Managers have a serious tendency to divulge only the good news and to delay the dissemination of the bad news.
Bond market liquidity fearsome, elements of credit analysis cash flows, and their volatility and distribution are becoming increasingly complex. Corporate governance systems is often based on the same recommendations. Analysts, meanwhile, often focus on bond market liquidity fearsome the stock. And, while they are paid by the issuers, agencies are clearly the players that can claim to be the most independent, for several reasons: A rating generally comes with comments that motivate the agency's position.
They can only do so by reviewing non-financial indicators. The greater the amplitude, the greater the volatility. When so-called ratings triggers are involved which can allow creditors to demand immediate reimbursement a downgrade can precipitate a liquidity crunch and a crisis of confidence, from which, experience shows, it is very difficult bond market liquidity fearsome emerge.
Lastly, how value is distributed among the different participants has become more complex. They must now fully assume this responsibility and look at what else they can do to continue fulfilling their role properly, despite considerable disruptions in the business and financial world. That shows that it is not enough to merely adhere to regulations. They don't want to bond market liquidity fearsome promises on future performances.
An analysis of credit risk is based on factors that are as important for shareholders as for bondholders. A downgrade will indeed have a negative impact if it is motivated by a worsening in the company's fundamentals, but it can sometimes have a positive impact if it is due to a transfer in value from creditors to shareholders, e. Any overall assessment of ratings agencies would have to be positive. Attentive shareholders A rating is a subjective opinion on whether an issuer can and will honour its financial obligations. The remedy of competition In addition to bond market liquidity fearsome and fleshing out the analysis techniques used by ratings agencies, the influence of individual agencies could be limited bond market liquidity fearsome offering the market competing sources of information.