Explanation:
Credit rating agencies have been widely criticized for being reactive rather than proactive, often taking too long to adjust ratings (downgrading or upgrading) in response to changing market conditions or new information. They tend to wait for absolute certainty before altering a rating, resulting in a 'lagging' effect.
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Q.68 For which of the following reasons are rating agencies most usually criticized?
A
Being too optimistic in the assessment of corporate ratings and too pessimistic in the assessment of sovereign ratings
B
Failure to align ratings with each other before publishing (e.g., one rating agency may downgrade a sovereign rating of the country to speculate grade, while the other can still keep it with investment grade)
C
Taking too long to change a rating
D
Charging high fees for publishing corporate and sovereign ratings
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