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Making Things Valuable$
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Martin Kornberger, Lise Justesen, Jan Mouritsen, and Anders Koed Madsen

Print publication date: 2015

Print ISBN-13: 9780198712282

Published to Oxford Scholarship Online: October 2015

DOI: 10.1093/acprof:oso/9780198712282.001.0001

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Rating Reports as Figuring Documents

Rating Reports as Figuring Documents

How Credit Rating Agencies Build Scenarios of the Future

(p.62) 3 Rating Reports as Figuring Documents
Making Things Valuable

Pierre Pénet

Oxford University Press

This chapter investigates the techniques credit rating agencies (CRAs) use to produce sovereign ratings. In market environments typical of times of crisis, CRAs do more than simply collect additional information when they are unsure about their ratings. CRAs resort to a set of constitutive techniques by which they adapt strategically to cognitive inconsistencies and credibility concerns. Drawing on Moody’s rating reports issued for downgrades of Greek sovereign bonds, the chapter focuses on three of such constitutive techniques: plausibility, backward reasoning, and reactivity. Rating reports are ‘figuring’ documents in which CRAs generate figures about, as well as ‘figure out’ the financial uncertainties they are tasked with predicting. The chapter describes the bundle of cognitive, legal, and political uncertainties which, together, explain how rating inconsistencies played out in the unfolding Greek sovereign debt crisis. The chapter contributes to recent research on legal knowledge in the global financial markets.

Keywords:   figuring techniques, risk valuation, credit ratings, sovereign debt crisis, financial uncertainty

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