<abstract xmlns="http://www.w3.org/1999/xhtml">

<bold>Background:</bold> The motivation for this article is the observation of political and private efforts to establish an EU-based rating agency as a counterweight to the three major agencies and observe other approaches to increase competition in the rating market.
<bold>Objectives:</bold> This article aims to analyse the potential regulatory impact of the oligopo-listic situation on the European Union (EU) rating market in the regulation imposed on the agencies.
<bold>Methods/Approach:</bold> Selected key figures are applied to observe if and how the dominance has changed. The different rating service range offered by the registered rating agencies in the EU is also considered in the analysis.
<bold>Results:</bold> The re-search results show that new agencies potentially impact the EU rating market. While the three major rating agencies still dominate the market, they do so within a chang-ing environment.
<bold>Conclusions:</bold> The employment of external ratings is significant in the financial sector. Ratings provide relevant information on the default risk of financial instruments and assess the solvency of issuers. The market for external ratings thereby can be classified as oligopolistic. Turbulences during the financial crisis of 2008 trig-gered stricter regulation of the credit rating agencies. Such regulation has now been in force for a good decade.
</abstract>

Background: The motivation for this article is the observation of political and private efforts to establish an EU-based rating agency as a counterweight to the three major agencies and observe other approaches to increase competition in the rating market.
Objectives: This article aims to analyse the potential regulatory impact of the oligopo-listic situation on the European Union (EU) rating market in the regulation imposed on the agencies.
Methods/Approach: Selected key figures are applied to observe if and how the dominance has changed. The different rating service range offered by the registered rating agencies in the EU is also considered in the analysis.
Results: The re-search results show that new agencies potentially impact the EU rating market. While the three major rating agencies still dominate the market, they do so within a chang-ing environment.
Conclusions: The employment of external ratings is significant in the financial sector. Ratings provide relevant information on the default risk of financial instruments and assess the solvency of issuers. The market for external ratings thereby can be classified as oligopolistic. Turbulences during the financial crisis of 2008 trig-gered stricter regulation of the credit rating agencies. Such regulation has now been in force for a good decade.

Market Structure Development in a Regulated Market: The Case of the EU Rating Agencies

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution 4.0 International License.

Background: The motivation for this article is the observation of political and private efforts to establish an EU-based rating agency as a counterweight to...

Market Structure Development in a Regulated Market: The Case of the EU Rating Agencies

Online veröffentlicht: 10. Apr. 2022

Seitenbereich: 187 - 199

Eingereicht: 25. Jan. 2021

Akzeptiert: 11. Juli 2021

DOI: https://doi.org/10.2478/bsrj-2021-0027

Schlüsselwörter
Credit rating agencies (CRAs), ratings, regulation, EU-Regulation, sustaina-bility ratings, corporate finance, capital markets

© 2021 Gunther Meeh-Bunse et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Market Structure Development in a Regulated Market: The Case of the EU Rating Agencies

Online veröffentlicht: 10. Apr. 2022

Seitenbereich: 187 - 199

Eingereicht: 25. Jan. 2021

Akzeptiert: 11. Juli 2021

DOI: https://doi.org/10.2478/bsrj-2021-0027

SchlüsselwörterCredit rating agencies (CRAs), ratings, regulation, EU-Regulation, sustaina-bility ratings, corporate finance, capital markets

© 2021 Gunther Meeh-Bunse et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Schlüsselwörter
Credit rating agencies (CRAs), ratings, regulation, EU-Regulation, sustaina-bility ratings, corporate finance, capital markets