A Strict Liability Regime for Rating Agencies.

In this article, the authors discusses how to improve the accuracy of ratings provided by credit rating agencies (CRAs) and propose an expiring, capped strict liability rule with a contractual component. It mentions that beneficial role of CRAs in financial markets and the problem of systemic risk. It also mentions that how the strict liability rule should be corrected to cope with this problem in the two cases of corporate bonds and structured finance products.