skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

Stakes Sensitivity and Credit Rating: A New Challenge for Regulators

Journal of business ethics, 2021-02, Vol.169 (1), p.169-179 [Peer Reviewed Journal]

The Author(s) 2019 ;Journal of Business Ethics is a copyright of Springer, (2019). All Rights Reserved. © 2019. This work is published under http://creativecommons.org/licenses/by/4.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;The Author(s) 2019. This work is published under http://creativecommons.org/licenses/by/4.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 0167-4544 ;EISSN: 1573-0697 ;DOI: 10.1007/s10551-019-04260-2

Full text available

Citations Cited by
  • Title:
    Stakes Sensitivity and Credit Rating: A New Challenge for Regulators
  • Author: Booth, Anthony ; de Bruin, Boudewijn
  • Subjects: Beneficiaries ; Business and Management ; Business Ethics ; Credit ; Credit ratings ; Credit risk ; Economic crisis ; Economists ; Education ; Epistemology ; Ethics ; Institutional investments ; Insurance ; Investors ; Management ; Original Paper ; Pension funds ; Philosophy ; Policy making ; Quality of Life Research ; Rating services ; Ratings & rankings ; Regulation
  • Is Part Of: Journal of business ethics, 2021-02, Vol.169 (1), p.169-179
  • Description: The ethical practices of credit rating agencies (CRAs), particularly following the 2008 financial crisis, have been subject to extensive analysis by economists, ethicists, and policymakers. We raise a novel issue facing CRAs that has to do with a problem concerning the transmission of epistemic status of ratings from CRAs to the beneficiaries of the ratings (investors, etc.), and use it to provide a new challenge for regulators. Building on recent work in philosophy, we argue that since CRAs have different stakes than the beneficiaries of the ratings in the ratings being accurate, what counts as knowledge (and as having ‘epistemic status’) concerning credit risk for a CRA may not count as knowledge (as having epistemic status) for the beneficiary. Further, as it stands, many institutional investors (pension funds, insurance companies, etc.) are bound by law to make some of their investment decisions dependent on the ratings of officially recognized CRAs. We argue that the observation that the epistemic status of ratings does not transmit from CRAs to beneficiaries makes salient a new challenge for those who think current regulation regarding the CRAs is prudentially justified, namely, to show that the harm caused by acting on a rating that does not have epistemic status for beneficiaries is compensated by the benefit from them acting on a CRA rating that does have epistemic status for the CRA. Unlike most other commentators, therefore, we offer a defeasible reason to drop references to CRAs in prudential regulation of the financial industry.
  • Publisher: Dordrecht: Springer Netherlands
  • Language: English
  • Identifier: ISSN: 0167-4544
    EISSN: 1573-0697
    DOI: 10.1007/s10551-019-04260-2
  • Source: ProQuest One Psychology
    Springer Nature OA/Free Journals
    ProQuest Central
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait