FAKTOR-FAKTOR YANG MENYEBABKAN KEGAGALAN PEMERlNGKATAN SURAT UTANG SUBPRIME MORTGAGE

Abstract

Deterioration  in portions  of the  u.s. subprime market  has metastasized  into severe dislocations  in broader credit and funding markets that  now pose  risks to the macroeconomic  outlook  in the United States  and global.  Credit ratings have been a key input/or many   investors   in  the  valuation   of  structured   credit  products because they have been perceived  to provide a common credit risk. The rating  credit agency  misrepresented  or failed  to disclose that assigned  excessively   high  ratings  to  structured   credit  products backed   by   risky   subprime    mortgages    which   was   materially misleading to investors  concerning  the quality  and relative risk: of these  Investments.  This paper  try  to examine  several factors   that causing  the credit  rating failures    in the structured  credit market valuation .these factors are .. the effort to maximizing profit from  the rating  agency.    (he fee   that  rating  agency  received  are from   the issuer  of  the  bond,    the  safety model  have    been pla1UJed can't overcome  the bankruptcy. similaritation  of   the credit rating of the bond with the existing instrument.   the better situation of the credit market  in  the  last few  years.     the  lack  of  understanding  of  the investor that credit rating   information just  describing  the default risk  information:     the  differences   of  the  accounting  Views.   the difjU'ulties to (Jppl)'ingtransparatton 10 the that bonds, and the:lack of  understanding  of  the rating  agenC'/   about  the  worst  economic condition.

Key words'  subprime mortgages. valuation. credit rating