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Dec 30, 2008 | #1
U.S. Credit Appraisal System
N.B: A rough draft meant only to be used as a guide!
An Investigation into U.S Credit Appraisal System
Word count: 4904
Abstract
This proposal seeks to investigate U.S credit appraisal system- mainly corporate- with a view of achieving several key objectives. Firstly, the proposal investigates the efficacy of credit appraisal system used by credit appraisal companies in the US, and how such efficacy has influenced the current financial crises. Secondly, the proposal analyses several credit rating companies and the methods they deploy in performing credit rating, with an eventual aim of assessing the effectiveness of such rating methods. Thirdly, the proposal investigates the current credit crises in the US, with a specific aim of addressing the root causes of the crises. Additionally, the role of the government in regulating credit ratings is investigated and failures by the government in this aspect are investigated. Fourthly, the proposal assesses the effectiveness of credit rating companies from a business perspective, ratings of bonds and other securities. Eventually, based on the key findings, the proposal will seek to develop a credit rating model usable in credit rating and which, if used effectively, can greatly help in averting future crises.Table of contents
Content page
Introduction ................................................................. .......... .................................................4
Research objectives ................................................................. .......... ...................................9
Hypothetical background....................................................... .......... .....................................10
Research framework........................................................ .......... ............................................11
Literature review........................................................... .......... .............................................12
Research methodology ................................................................. .......... .............................17
Data collection....................................................... .......... ......................................................18
Data analysis ................................................................. .......... .............................................19
Timeframe........................................................ .......... ...........................................................21
Conclusion....................................................... .......... ..............................................................22
References....................................................... .......... ..............................................................23
Introduction
Corporate credit appraisal is a fundamental business practice which assesses the potentialities of a corporation in terms of financial capabilities to honour debts and other securities. A critical role of credit rating is, in its very basic essence, to ensure that the borrower has good potential to repay debts and as such determine the level of confidence a lender has with the borrower. Ideally, several instrumental fundamentals are used to assess the credit worthiness of corporate credit appraisal and they include, amongst others, financial history of a corporation, its assets and liabilities and its projected future performance.
Scholars generally agrees that the methodologies used by credit rating companies influences, to a large extent, the credit sphere with such fundamentals such as loan performance, creditworthiness and, generally, economic performance coming into a complex interplay, a phenomenon which greatly influences the general performance of national and, to an extent, the global economy. Without a viable and effective credit appraisal framework, chances are that there will be a credit crunch and general economic turmoil such as the one being witnessed in the US and all over the globe. In fact the current crises being witnessed in the United States is partly as a result of inadequate rating methods used by the credit rating agencies.
To effectively understand the subject matter, it is necessary, indeed mandatory that the methods used by credit rating companies be investigated, an undertaking that will help in shedding more light to the causes of the current crisis. The methods used by the credit rating agencies recognised by the Security& Exchange commission. The commission decided to recognise the three agencies to prevent dishonest agencies from selling triple A rating to those with the highest bid, and thus avoid throwing the market into financial turmoil.
The three recognised agencies include: Standard & Poor's (S&P), a division of McGraw-Hill, Moody investor services, owned by Moody corporation and Fitch, owned by the Fitch Group.
Standard & Poor's (S&P)
Ownership: The McGraw-Hill Companies
Senior management: Deven Sharma, president, and Vickie Tillman, executive vice-president
Established: 1916
Designation: Nationally Recognised Statistical Rating Organisation by the US Securities and Exchange Commission, and External Credit Assessment Institution under Basel II
Full-year operating revenues 2007: $2.3bn (€1.47bn) (S& Ps does not break down profits per division)
Number of employees: 8,500 approx
Number of ratings assigned: 510,000
Total amount of debt rated: $32 trillion
Investment grade
AAA: Extremely strong capacity to meet financial commitments. Highest rating
AA: Very strong capacity to meet financial commitments
A: Strong capacity to meet financial commitments, but susceptible to adverse economic conditions and changes in circumstances
BBB: Adequate capacity to meet financial commitments, but more subject to adverse economic conditions
BBB-: Lowest rating before non-investment grade, or junk status
Sub-investment grade
BB: Less vulnerable in the near term but faces major uncertainties to adverse business, financial and economic conditions
B: More vulnerable to adverse business, financial and economic conditions but has the capacity to meet financial commitments
CCC: Vulnerable and dependent on favourable business, financial and economic conditions to meet financial commitments
CC: Highly vulnerable
C: A bankruptcy petition has been filed or similar action taken but payments or financial commitments are continued
D: Payment default on financial commitments.
Moody Investors Service
Ownership: Moody Corporation
Senior management: Raymond MacDaniel, chairman and chief executive
Established: 1909
Designation: Nationally Recognised Statistical Rating Organisation by the US Securities and Exchange Commission, and External Credit Assessment Institution under Basel II
Full-year group operating profits 2007: $1.13bn
Number of employees: 3,150
Number of institutions rated:137,100
Total amount of debt rated: Undisclosed
Investment grade
Aaa: Obligations judged to be of the highest quality, with minimal credit risk
Aa1, Aa2, Aa3: Obligations judged to be of high quality and are subject to very low credit risk
A1, A2, A3: Obligations considered upper-medium grade and are subject to low credit risk
Baa1, Baa2, Baa3: Obligations subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics
Speculative grade
Ba1, Ba2, Ba3: Obligations judged to have speculative elements and are subject to substantial credit risk
B1, B2, B3: Obligations considered speculative and are subject to high credit risk
Caa1, Caa2, Caa3: Obligations judged to be of poor standing and are subject to very high credit risk
Ca: Obligations judged to be highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest
C: Obligations that are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.
Fitch
Ownership: Fitch Group, majority owned by Fimalac, an international business support services group
Senior Management: Stephen Joynt, president and chief executive
Established: 1913
Designation: Nationally Recognised Statistical Rating Organisation by the US Securities and Exchange Commission, and External Credit Assessment Institution under Basel II
Full-year group operating revenues 2007: $1.2bn (includes the ratings and enterprise risk management units)
Employees: More than 2,100
Number of companies/institutions rated: 111,300
Total amount of debt rated: Undisclosed
Investment grade
AAA: The best quality companies, reliable and stable
AA: Quality companies, a bit higher risk than AAA
A: Economic situation can affect finance
BBB: medium class companies, which are satisfactory at the moment
Sub-investment grade
BB: More prone to changes in the economy
B: Financial situation varies noticeably
CCC: Vulnerable and dependent on favourable economic conditions to meet its commitments
CC: Highly vulnerable, very speculative bonds
C: Highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
D: Has defaulted on obligations and Fitch believes that the company will generally default on most or all financial obligations
Despite these seemingly impressive credit rating methods, there has been a sharp criticism of the credit rating agencies and their method of credit appraisal. This is especially in the light of the current crisis, where credit crunch brought about contracted liquidity due to failure of mortgages.
Firstly, it must be noted that one of the principal role of a credit rating company is to offer critical and useful financial information of futuristic nature and which contains critical financial dynamics that can be used to predict a future turmoil in the financial markets and, thusly, can be used to avert such crises. However, heavy criticism has been subjected to the credit rating agencies in the US- specifically the three recognised agencies- for not able -advertently or not- to predict the crisis. Indeed it has been suggested that credit rating companies must adapt themselves to new market arrangement where there is little regulation. Kerr(2008) writes that 'Agencies need to adapt to survive the market turmoil. In credit crises of recent history, the credit ratings industry has faced criticism from the capital markets for the part it has allegedly played in failing to predict the turmoil'. Indeed the author notes that the integrity of the three credit rating agencies has been put into question.
The credit rating agencies have been attacked from diverse areas. Firstly, they were attacked because of debt securities which were backed by risky US sub prime mortgages yet they were given high ratings. Kerr (2008) notes that 'their first attack focuses on the esoteric area of structured finance, or complex collateralised debt securities. Many of these were backed by risky US sub-prime mortgages, but were still highly rated at the triple-A level similar to the debt of the US Government'.
Yet another charge was that the agencies were using models which were not comprehensive leading to large cases of defaulters' Kerr(2008) further notes that'The charge is the ratings models which agencies used to evaluate the default risk on such securities was inadequate, leading to large downgrades as delinquencies on these sub-prime loans increased. This has forced the value of these securities to crash, bringing about multi-billion dollar losses and write downs and a bout of deleveraging and risk repricing few had foreseen'. Indeed the credit rating agencies have themselves admitted to having failed to learn lessons on the fall out. 'For their part, rating agencies have admitted they have had to learn some hard lessons from the sub-prime fallout. They have always sought to clarify their role by stating that their ratings only measure credit quality. A credit rating is not intended to capture the risk of a decline in market value or liquidity of the rated instrument, nor should it be considered an investment recommendation'(Kerr 2008).
As such several recommendations have been made to avoid such a crisis in the future. Most of recommendations have been regulatory in nature. President Bush of US has been quoted saying 'Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st century global economy remains regulated largely by outdated 20th century laws. Recently, we've seen how one company can grow so large that its failure jeopardizes the entire financial system'
The kind of regulations being considered include regulation of lending practices, change in how bonds and other securities are rated, ensuring there is affordable housing, counselling of credit holders amongst other measures.
Upon examination of available, there was scant information-from academic literature rather than newspaper reports- on how credit rating agencies modus operandi fuelled the current crises(this is understandable since the crises is relatively 'young'). To fill this research void, the proposed project will examine the credit appraisal system of the US with a view of unravelling how it works, and how it fuelled the current crisis. Secondly, the project will examine several credit rating companies in the US so that the efficacy of their rating styles can be appraised. Thirdly, the project will assess the current crisis to unearth the causes of the current crisis. The role of US government in regulating credit will also be examined, so are the failures of the government. Ultimately the project will seek to develop a credit rating model usable for credit ratings, its limitation being that it will be modelled using information from US corporate sector and thus its internationalisation will not be viable without further data validation.
Objectives
The key objectives of this proposal are:
a) A general investigation into U.S credit appraisal system- mainly corporate- with a view of achieving how the entire system works, the weaknesses of the system and how this has fuelled the current crises.
b) An investigation into several credit rating companies and the methods they deploy in performing credit rating, with an eventual aim of assessing the effectiveness of such rating methods.
c) Investigate the current credit crises in the US, with a specific aim of addressing the root causes of the crises. Additionally, the role of the government in regulating credit ratings is investigated and failures by the government in this aspect are investigated.
d) An assessment of effectiveness of credit rating companies from a business perspective, ratings of bonds and other securities.
Upon achieving the research objectives, it will be possible to develop a generic model which will be used to assess capabilities of companies to meet their debt obligation, which will go a long way in averting financial crises in the future.
Research questions
For the project to succeed several key research questions will have to be answered. The questions will be in line with the overall objectives of the project. They include:
a) How does the credit rating appraisal(for corporate sector) work in the US?
b) How do credit rating companies in the US rate other companies?
c) How do the three credit rating companies in the US work and how did they fuel the current financial crisis?
d) What is the role of U.S government in regulating the credit markets?
e) Is it possible to develop a model that can be used by the credit rating companies in ensuring they are more effective?
Hypothetical background
In financial markets, crises are fuelled by certain market dynamics.
Hypothesis one: The current crisis in financial market is partly as a result of lack of regulation in the credit markets.
Hypothesis two: US credit rating companies failed to detect the current crisis and their poor operational frameworks can be detected.
Hypothesis three: Using credible viewpoints of researchers, it is possible to develop a model which can help credit rating agencies in averting such crises in the future
Research framework
The framework below is suggested as guidance in conducting the project.
Literature review
Introduction
This section of the proposal serves several purposes. Firstly, the review investigates the major aspects of corporate credit appraisal in the US with a view of unravelling how the US credit appraisal system works and how the current study can contribute to the existing strands of literature defining this crucial aspect of the US economy. Secondly, the review investigates the current credit crisis which has engulfed the US economy and the root causes of the crisis are investigated with special reference to the inadequateness of the credit rating companies to detect this problem. The role of government in ensuring that credit crisis occurs(and can be prevented) such as the one being witnessed is also examined with a view of establishing the government's role in the crisis. Eventually key voids in the examined literature are examined, whereof proposals to fill the identified voids in literature are provided, as is the need to develop a model to avoid financial and credit crisis in future is also offered.
In short, the review examines the available veins of literature which rhymes with the current study and how the current study can contribute to the existing strands of literature is offered.
Credit appraisal in the US and the current crisis
Credit rating companies play a fundamental role in shaping economic directions of countries. Elkhoury(2008) aptly captures the role of credit rating agencies thus '
Credit rating agencies (CRAs) play a key role in financial markets by helping to reduce the
informative asymmetry between lenders and investors, on one side, and issuers on the other
side, about the creditworthiness of companies or countries. CRAs' role has expanded with
financial globalization and has received an additional boost from Basel II which incorporates
the ratings of CRAs into the rules for setting weights for credit risk. Ratings tend to be sticky,
lagging markets, and overreact when they do change. This overreaction may have aggravated
financial crises in the recent past, contributing to financial instability and cross-country
contagion'
In the united states, just like in other industrialised countries, credit rating agencies(CRA's) are crucially important manifestations of financial spheres and their role in driving economies cannot be underrated.(Elkhoury ,2008). In United States, credit rating agencies help a great deal in reducing 'informative asymmetry between lenders and investors, on one side, and issuers on the other side, about the creditworthiness of companies or countries' (Elkhoury 2008).
With massive liberalisation of the financial sector in the united states, scholars recommend the need for new appraisal rules once it comes to credit rating so that credit rating agencies can adopt themselves to new challenges facing deregulated US economy and avoid financial crisis(Bhattacharya, 1999) with even new models for assessing the credit worthiness of corporations being recommended(Bhattacharya, 1999).
Credit appraisal in the United States is an industry that continues to face several challenges. Firstly, the industry has the agencies have continued to operate within their own financial and market architectural frameworks, despite massive changes which have continued to present themselves in the financial sector(Kerr, 2008).
Of late ,credit appraisal agencies in the United States has come under focus due to the prevailing credit crisis facing the country and ,by extension, the global economy as well(Hunt, 2008). It has been generally agreed that the modus operand of the credit rating agencies has greatly contributed to the crisis (Hunt, 2008).
Several criticism has been levelled against the major credit rating agencies.
For one for CRAs to be effective they must not back securities of whatever nature with risky financial modalities(Sandage, 2005). In particular debt securities cannot be secured with risky mortgages since this only increases the level of defaults. Any security must be relative safe and not prone to fluctuations brought about by uncertainties in the market(Hunt, 2008). However, Kerr(2008) shows that most of debt securities were secured by risky sub prime mortgages which, almost without exceptional, would have lead to massive credit crunch. He Writes that '. Many of these[debt securities] were backed by risky US sub-prime mortgages, but were still highly rated at the triple-A level similar to the debt of the US Government'. Obviously this would create high level of default, resulting in heavy losses and stagnated growth of the financial markers, particularly the stock market(Hunt, 2008).
Elkhoury (2008) shows that for credit rating agencies to be effective, they must constantly reform themselves, at level with the ever changing aspects of financial sector. This is because financial sector in the United States , and the globe as well, is constantly changing in terms of debts acquisition, structured financial markets, and the stock market. Hence credit appraisal methodologies as well as models for such appraisal must constantly be reviewed to reflect the new realities driving the modern day financial market. However, credit appraisal agencies in the US have been criticised for using old fashioned appraisal models, facilitating irrational and inappropriate credit scores. Kerr(2008) reports that the agencies have been accused of using inadequate models leading to crash of securities' The charge is the ratings models which agencies used to evaluate the default risk on such securities was inadequate, leading to large downgrades as delinquencies on these sub-prime loans increased. This has forced the value of these securities to crash, bringing about multi-billion dollar losses and writedowns and a bout of deleveraging and risk repricing few had foreseen'.
Additionally, it has been noted that the quality of the agencies rating process must be effective and accountable to issuers of debts. In particular, it has been reported that in course of executing their responsibilities, CRAs should not, ideally, encounter financial situations which compromise their integrity(Elkhoury 2008). This, it has been shown, would reduce the levels of risks of debt issuers. However , Kerr(2008) reports that the quality of rating process of the agencies has been poor, with cases of conflict of interests being detected. '
it has recommended expanding the[voluntary] code to try to ensure the quality of the rating process, avoid conflicts of interest, define agencies responsibilities to issuers of debt and credit investors and clarify agencies communication with market participants'
Key recoomendations have been made to address the problem(Hunt, 2008). However the author writes that such measures are intended to 'enhancing competition, promoting transparency, reducing conflicts of interest, and reducing ratings-dependent regulation. These approaches are all broadly consistent with the dominant academic theory of rating agencies, the "reputational capital" model, which is taken to imply that under the right circumstances a well-functioning reputation mechanism will deter low-quality ratings. The policy initiatives currently under consideration can be seen as efforts to fix discrete problems with the rating market so that the reputation mechanism can work properly.'
Summary
The preceding part of the review has examined several key aspects of the credit appraisal sector in the United States.
For one, it has emerged that the markets have become highly liberalised and there is need for credit appraisal agencies to reform so as to fit in the changing market dynamics, in line with the views expressed by Bhattarya,( 1999). To build on this strand of literature, the proposed study will extensively research into the changing operations of modern financial systems in the United States, with an aim of developing solutions on the kind of reforms the credit rating agencies can adopt to fit into modern financial systems.
Secondly, it has emerged that the credit rating agencies have not adopted themselves to the changing markets, as exposited by Kerr(2008). To add to this stream of literature, the project will investigate the root causes of this manifestation, with an aim of unravelling the reasons for reluctance on the part of the agencies to reform and adopt themselves to the changing market situations. In particular, the project will examine the reasons behind this reluctance and offer solutions- based on opinions of credible researchers- to solve this problem.
Thirdly, it has emerged that the models used by credit rating agencies are not adequate and as such put the debtors at risk(Kerr, 2008). Such models will be investigated and their shortcomings unravelled.
Ultimately, the obtained opinions will, in part, be used to help in the realisation of the proposed model.
Role of government
Government regulation in any business is inevitable. This is because without government regulations, market forces will compete in an unhealthy way, which could harm economies all over the world(Hunt, 2008). In spite of this aspect, key fundamentals raise in terms of the extent that governments should go in regulating business, particularly credit appraisal business(Kerr, 2008). In the United States some scholars have argued that lack of good regulatory frameworks fuelled the current crisis. In particular, the United States government has been accused of fuelling the current crisis through encouraging advancing of mortgages to low income earners, who are riskier.
Horwitx(2008) explains this aspect 'Throughout the 1990s, Washington encouraged these GSEs to expand home-ownership among lower-income, and thus more risky, borrowers. In 2004 and 2005, following the accounting scandals at Freddie, both GSEs paid penance to Congress by agreeing to expand their direct lending to low-income, higher-risk customers. Both acquired more subprime and Alt-A loans, making it profitable for banks to originate them, confident that the US taxpayers ultimately stood behind Freddie and Fannie. From 2003 to 2006, the percentage of loans the GSEs made in those riskier categories grew from8 percent to about 20 percent in 2006. This meddling helped drive up housing prices, leading other players to pile fancy new instruments on top of those mortgages, leading to a speculative bubble that was, at root, caused by the actions of two government-sponsored entities unleashed from the normal profit-and-loss checks of the free market'
The author further observes that the Federal Reserve, lowered interest rates thus fuelling the housing boom 'fueling this speculative fire was the Federal Reserve, also a government-sponsored organization. The Fed moved interest rates to extraordinarily low levels beginning in 2001. The additional credit it provided artificially lowered the cost of mortgages and dramatically accelerated the housing boom begun in the 1990'.
Hence the role of government in regulating CRAs comes into question. Hunt(2008) observes that whilst market should generate operate freely , the US government must put in place credible regulatory measures which will ensure CRAs operate in a more reliable manner and not put issuers of debts to risk
Summary
It has also emerged that the US government played a key role in fuelling the current crisis. This aspect will be investigated in the project and key recommendations given on the role and regulatory frameworks that the government need to adopt to avert future crises.
Specifically, opinions from diverse scholars will be incorporated into the model , so that the model will also be usable within the contexts of regulatory frameworks implemented by the government.
The Model
On identified verifiable and objective viewpoints from literature, the model will be developed using the viewpoints. The model will then be generalised so that it is usable within the overall contexts of credit rating and it is hoped the model will go a long way in ensuring that there is enough information usable by researchers in course of their research in the area of credit appraisal.
Methodology
Introduction
In any research work, the methodology used is of crucial significance. This is because the methodology used goes a long way in determining the success or failure of a research undertaking(Strauss and Corbin 1990).. Any research methodology used must be able to meet certain goals. For one, any research methodology used must help in achievement of the objectives of the study. (Strauss and Corbin 1990). Secondly, the research methodology must deliver accurate data and, by extension, accurate results(Strauss and Corbin 1990)..
Hence the following criterion was used to choose a good research methodology:
a) The methodology must rhyme with the overall spirit of the study.
b) The methodology must deliver accurate results.
c) The methodology must enhance the realisation of the objectives of the study.
d) The methodology is workable and efficient in terms of meeting the objectives of the study.
[[/b]]Collection of Data[/b]
Secondary research
The project will used secondary data as opposed to primary data. Secondary data is data sourced from primary sources and then amalgamated to produce credible research opinions based on research done by other researchers. However, key aspects will be used when using secondary data to ensure the credibility of the final product.
These are measures that the data used is objective and as such there is credible opinion formed out the data:
a) Data will be sourced from credible sources such as peer reviewed journals, books published by respected authors and objective internet sources.
b) The researcher will make a point of validating data sourced from the primary sources with data/viewpoints addressing the same issue with a view of ensuring that the data used is reliable.
c) Extensive research will be undertaken to ensure that the scope of the project resonates well with the objectives of the study.
d) The author will- where applicable- intentionally avoid data that has been generated without any empirical research being undertaken .
e) Constant consultations with the project supervisor will ensure that information which is misleading is sieved out.
f) Reports- especially on the credit crisis- retrieved from newspapers will only be used where the newspaper concerned is known to be objective especially on financial matters.
Instrumentation
There is no formal applicable instrument in data collection ,save for creating folders which will hold viewpoints of a particular issue.
Data analysis
Introduction
Data analysis will be of two forms
a) Analysis of information addressing the key issues to be addressed by the report. These include, amongst others, analysis of credit appraisal in the US , operations of major credit rating companies in the US, the current crises in the financial sector, role of government and credit rating agencies in the current crisis, amongst other issues relevant to the project
- In this analysis, key issues and viewpoints will be addressed with a view of amalgamating the major viewpoints to develop an integrated research work on the credit rating agencies in the US. Obviously, independent views on the subject matter will be coalesced to address the subject and as such produce an integrated viewpoint of the whole subject. Hence- and obviously- a data analysis technique known as constant comparative technique will be used. With this type of analysis, isolated facts are examined by noting the key and similar concepts and then 'joining' them to get a picture of the whole issue. There is no formal methodology recommended in this type of research since must of information synthesis depend largely on the competence of the researcher, and the researcher, in this case, feels he has adequate tools to process data.
- Processing of findings to develop the model
- With the major viewpoints developed into a cohesive and evaluative work, the next step will be to develop the model which will be used by credit rating companies to help them avert future financial crisis. As such, based on key recommendations from diverse authors on the various dynamics of credit rating, the researcher will 'generalise' their viewpoints to develop the model. Again, constant comparative technique will be used to 'join' and generalise the data to create a generic model. In this regard, key recommendations by various authors will be identified and a model based on the recommendations will be developed. It must be mentioned that when analysing data which is of qualitative nature, there is no formal and rigid methodology recommended and therefore the outcome of the modelling will, to a large extent, be dependent on the skills of the researcher (Strauss and Corbin 1990).
Ethical considerations
In any research work, there are ethical issues to be considered ,especially in terms of usage of information. The website- asanet.org/members/ecoderev.html notes that a researcher "may conduct research in public places or use publicly available information about individuals (such as naturalistic observations in public places and analysis of public records or archival research) without obtaining consent". Hence the researcher will ensure that data used for the project will be publicly available and also ensure that all sources used are acknowledged static.cc.gatech.edu/~asb/ethics/. Has some rules to be used when a researcher used information. It states that a researcher can use information without consent if such information is
a. 'It is officially, publicly archived.
b. No password is required for archive access.
c. No site policy prohibits it.
d. The topic is not highly sensitive'
The researcher will stick to those guidelines to ensure no ethical issues arise.
Expected Limitations of Data analysis
A key weakness with qualitative analysis of information is that there is a chance that the researcher may not be objective and as such compromise the integrity of the final product. (Strauss and Corbin 1990). Efforts will be made to ensure that biases are reduced to minimum and also ensure that the model created is based on objective research works.
Time Frame
EVENT
DESCRIPTION
PERIOD
Conclusion
It is hoped that once the project is complete, it will go a long way in furnishing credit ratings research sphere with new research insights, thusly contributing to the literature informing credit ratings in general and credit crises in particular.
References
The sub prime crises. Retrieved from financialnews.com. 19th , October, 2008. Online .
Kerr Duncan(2008). Credit Rating Industry facing up criticism. retrieved from fiancialnews. 20th October, 2008. Online.
White house pres