This book aims to enhance the understanding of credit rating agencies as constitutive actors in global financial capitalism. The relevance of these institutions goes far beyond the seemingly technical world of finance. A deeper understanding of the pervasiveness of credit ratings in today's financial markets raises awareness of the industry's political and social importance. It is not only corporations, banks and governments that are subject to the consequential judgements of these private companies. Academic institutions, infrastructure and transportation entities such as port authorities, highway operators and other public good providers in the health and medical sector are rated, as soon as they aspire to have access to international capital markets to refinance themselves.

The purpose of this book is not to criticize the CRAs for the sake of criticism. If this were the case, it would just contribute a further (probably unnecessary) line of argument to the already existing and extensive CRA critique. This book is an attempt to go beyond the conventional functionalist reading of the credit rating agencies’ role, which basically reduces the CRAs to institutions that decrease information asymmetries on financial markets. Ironically, the public attention paid to the CRAs in the course of the GFC has contributed to the corroboration of such preconceived notions about CRAs among policy- makers, practitioners, the media and scholars.

The agencies’ work is not replicable, and the oligopoly not easily replaced. CRAs do not discover ratings, as if the information about credit risk pre- exists, free from interpretation; they create ratings. Ratings are social constructions that rest on certain interpretations of the material world. Therefore, it is important to acknowledge the contingent character of assessing creditworthiness. In their capacity of epistemic authority, CRAs define the relevant knowledge about credit risk assessment. This allows them to exert narrative authority in the discourse about creditworthiness. In order to make disintermediated markets work, an epistemic authority that issues centralized judgements on creditworthiness is inevitable. A functionalist reading misses exactly this authoritative dimension of the agencies’ work, while underestimating the systematic role of the agencies: CRAs do not only decrease information asymmetries but, most importantly, coordinate market expectations, fix meanings and establish commonly held interpretations of debt issuers’ creditworthiness.