Rating Agencies

Rating agencies evaluate the financial health and creditworthiness of companies and government entities.

These agencies cover a wide range of financial instruments and areas for evaluation. This includes bonds, currencies, asset-backed securities (ABSs), swaps, liquidity, environmental, social, and governance (ESG) factors, cyber risk, funds, mortgages, and volatility.

Career Opportunities

• Macro Analysts: These professionals focus on analyzing broader economic trends, such as inflation or demographic shifts. They aim to connect these macroeconomic trends to the companies and entities they assess.
• Rating Analysts: Rating analysts are responsible for assigning credit ratings to borrowers or securities. Their assessments are based on a thorough analysis of financial data and other relevant information.
• Additional Services: In addition to their primary credit rating activities, many rating agencies offer a range of other services. These can include market intelligence, data analytics, research publications, and advisory services. For instance, S&P Global Ratings is known for acquiring smaller research firms to enhance its offerings.

The Big Three

The most prominent credit rating agencies, often referred to as the "Big Three," are S&P Global Ratings, Moody’s, and Fitch Ratings. These agencies collectively dominate the global market, holding a substantial market share of approximately 95%.

Examples

Regulatory Agencies

Regulatory agencies, often referred to as regulators, are government entities tasked with overseeing and enforcing rules and regulations that govern the financial system and markets.

Types

• Prudential Regulators: These regulators focus on assessing and ensuring the stability and integrity of financial institutions such as banks, insurance companies, and pension funds. They work to verify that these institutions maintain adequate resources, implement effective risk management processes, and adhere to sound governance practices.
• Market Regulators: Market regulators are responsible for supervising and promoting the fair and efficient operation of financial markets. Their primary objectives include preventing fraud, market manipulation, and abusive practices that could harm investors or disrupt the market's integrity.