Respondents here agreed that agency ratings were very useful in the corporate space, as they are readily available, generally accepted and widely recognized within that asset class. However, most survey respondents stated that the lack of transparency, questionable usefulness of historical data, erratic performance and limited coverage outside of the corporate space were large drawbacks to Nationally Recognized Statistical Rating Organization (NRSRO) ratings in the credit space.
Finally, respondents specifically highlighted the low statistical performance of agency ratings when assessing default risk (particularly in the non-corporate context), as well as their inability to accommodate macroeconomic factor-based stress testing.