Should credit rating agencies function as informative organizations after things happen or as a forewarning mechanism?
When S&P downgraded five state-backed companies in Dubai after $59billion of delayed payments, presumably it is targeting to help for avoidance of future casualties.
They have been one of the most criticized bodies during this recession and any potential default risk just brings them back under the scrutiny of the public.
S&P’s, Moody’s, Fitch will be under more pressure to meet the dynamic nature of the current economy and update their ratings more often.
S&P’s responded to that pressure by downgrading 20 European companies yesterday, highlighting the default risk until 2011.
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