Moody's, Standard & Poor's, Fitch are among the most renowned rating agencies, which over the last few decades have played an increasingly crucial role in the performance of international markets. Throughout the world their ratings are of the utmost concern for sovereign debtors, municipal authorities, banks, and businesses. Their activities have proven to be undeniably useful in assessing debtors' worth, but in many cases, and especially in relation to recent financial crises, their reputation has suffered strong setbacks. The agencies issued rating adjustments belatedly, they were pro-cyclical during the Asian crisis, and they didn't anticipate the mega-collapses of companies such as Enron, WorldCom, and Parmalat. The current sub-prime crisis has fed further accusations. But what exactly do rating agencies do, how are they established, how do they grow, and for whom do they work? This concise but exhaustive book helps the reader comprehend the structure, role, strengths, and weaknesses of a system that cannot avoid being afflicted by conflicts of interest.

Giovanni Ferri teaches Economics at the University of Bari and was a Principal Financial Economist at the World Bank.

Punziana Lacitignola has earned a doctorate in Economics at the University of Bari and a master's degree in Economics at the University of Glasgow.