Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297564 
Year of Publication: 
2021
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 15 [Issue:] 2 [Year:] 2021 [Pages:] 153-163
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
For decades, the credit rating market has been dominated by three major agencies (Moody's, S&P and Fitch Ratings). Their oligopolistic dominance is especially strong in sovereign credit ratings industry, where they hold a collective global share of more than 99%. Global financial crisis and the Eurozone sovereign debt crisis exposed serious flaws in rating process and forced public authorities to act. This study investigates effectiveness of new regulations adopted in the United States and in the European Union after financial crises in terms of reducing oligopolistic dominance of the "Big Three" in sovereign credit ratings market. The study applies descriptive statistical analysis of economic indicators describing concentration rate in a market, as well as content analysis of legal acts and case study methodology. Analysis shows that the Dodd-Frank reform and new European rules on supervision of credit rating agencies were not effective enough and did not lead to the increased competition in the market. The evidence from this study is explained using two alternative perspectives - economic theory of natural oligopoly and hegemonic stability theory coming from international relations field.
Subjects: 
Credit rating agencies
oligopoly
sovereign ratings
financial crisis
JEL: 
F34
F59
G15
G28
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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