Rating agencies definition in Wikipedia
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the services of the underlying debt are also given ratings.Source : http://en.wikipedia.org/wiki/Credit_rating_agency
With the advent of social media and a digitally connected world at almost real time credit rating agencies are under pressure to change they work . Will there come a time when rating agencies will have a twitter feed on companies as events impact the instruments that they rate, With the convergence of Big Data and the Financial World this seems to be the reality.
But it appears that these real time rating of financial instruments will emanate from new innovative and agile startups and not from the old established rating agencies.
The rating agencies have not been efficient in the past decade in helping investors in managing their risk since the markets move faster then the rating agencies ability to issue guidance in real time.
OWS (occupy wall street ) was the first death knell to the financial industry, yes OWS was quelled, but its new avatar using social media is crowd-sourcing funds by start-ups also known by some as crowd-funding is threatening established VC fund managers. The day is not fare away when Wall Street which is the bastion of funding by companies is sidelined by social media enabled fund collection innovations, which will lower the cost of capital significantly. .
Rating agencies will be the first to go, since crowd funding need no rating agency or credit rating symbols. IF you have a business plan that needs funding get your followers online and they will open their purse strings, Social media funding may get tougher once the regulator steps in cheered by the established wall street entities and also the need for governance and risk management. .
Social Media will kill the rating agencies by the end of the decade and we will have real time risk management tools which will emanate from convergence of Big Data and Risk management tools..
Please do share your thoughts about the imminent departure of rating agencies from Wall Street.
A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the services of the underlying debt are also given ratings.Source : http://en.wikipedia.org/wiki/Credit_rating_agency
With the advent of social media and a digitally connected world at almost real time credit rating agencies are under pressure to change they work . Will there come a time when rating agencies will have a twitter feed on companies as events impact the instruments that they rate, With the convergence of Big Data and the Financial World this seems to be the reality.
But it appears that these real time rating of financial instruments will emanate from new innovative and agile startups and not from the old established rating agencies.
The rating agencies have not been efficient in the past decade in helping investors in managing their risk since the markets move faster then the rating agencies ability to issue guidance in real time.
OWS (occupy wall street ) was the first death knell to the financial industry, yes OWS was quelled, but its new avatar using social media is crowd-sourcing funds by start-ups also known by some as crowd-funding is threatening established VC fund managers. The day is not fare away when Wall Street which is the bastion of funding by companies is sidelined by social media enabled fund collection innovations, which will lower the cost of capital significantly. .
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| Social Media and Crowd funding will make rating agencies obsolete! How do your rate the turbans in this crowd ! |
Social Media will kill the rating agencies by the end of the decade and we will have real time risk management tools which will emanate from convergence of Big Data and Risk management tools..
Please do share your thoughts about the imminent departure of rating agencies from Wall Street.
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