Assessing credit risk post-crisis at a central bank
How the Bank of Canada has developed its own credit assessment processes
Much attention was paid to the role of credit ratings and limits in the perpetuation of shocks through the financial market, in the aftermath of the global financial crisis. Concern was raised about the over-reliance market participants had placed on credit rating agencies (CRAs). This resulted in new guidance being provided by the Financial Stability Board (FSB) in late 2010. It included a section about the need for central banks to reduce their reliance on external ratings – a move that acted
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