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The role of non-state actors in transnational risk regulation: a case study of how the credit rating industry performs regulation

Safira van der Graaf, Judy (2015) The role of non-state actors in transnational risk regulation: a case study of how the credit rating industry performs regulation. PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

This thesis looks at the role of non-state actors in the regulation of risks. Regulation, conceptualised in this thesis as revolving around the anticipation and management of risks in economic life, is no longer considered to be a purely state-based activity, but is increasingly viewed as an activity that can involve a variety of actors including nonstate actors such as civic organisations and commercial firms. The limits on the ability of states to regulate risks on their own are becoming more and more visible in today’s integrated and interdependent markets. Our thinking about the capacity of the state to control is especially challenged by transnational risks, such as exemplified by the global financial crisis of 2007-08. Transnational risks easily spread across national borders. However, our knowledge about how non-state actors may be and can be involved in the regulation of risks, at both national and transnational levels, is predominantly theoretical and needs to be examined more critically and above all empirically. In this thesis a case study is presented of the credit rating industry. The credit rating industry has recurrently been identified as an important industry with regard to helping manage credit risk in the global debt capital markets. Using data collected through a documentary survey and 31 semi-structured interviews with current and former staff of rating agencies, this thesis explores the extent to which the credit rating industry is involved in three main components of a risk regulation regime: standard-setting, information-gathering, and behaviour-modification. The thesis will show that there are strong indicators that the credit rating industry is exercising regulation even though rating agencies expressly deny being a regulatory actor. It will discuss the ways in which rating agencies set standards of credit risk, gather and analyse vast amounts of information to assess how issuers of debt measure up to these standards, and aim to influence the behaviour of actors in debt capital markets through their rating processes and the credit ratings that they publish.

Item Type: Thesis (PhD)
Additional Information: © 2015 Judy Safira van der Graaf
Library of Congress subject classification: H Social Sciences > HG Finance
Sets: Departments > Sociology
Supervisor: Hutter, Bridget
URI: http://etheses.lse.ac.uk/id/eprint/3440

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