The upshot: ratings as a neglected force in global governance

Abstract

Abstract This chapter concludes by reflecting on three important related questions. First, how effective is the strategy of pre-emptively lowering ratings in protecting rating agencies in crises? The contrast between aggressive downgrades after the global financial crisis and the conspicuous passivity of rating agencies since the start of the coronavirus pandemic suggests that it is indeed beneficial for rating agencies to be able to show restraint in times of major shocks. Second, given the obvious problems and the political and policy implications of the current workings of sovereign ratings, could regulatory reforms bring improvement? The chapter argues that the political and policy interference of sovereign ratings is impossible to eliminate, because neither the significance nor the logic of ratings is amenable to change under the contemporary global financial architecture. Finally, the chapter sums up the lessons about the (anomalous) power of credit rating agencies within contemporary global governance.