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Credit Rating Agencies: What They Do and How They Do It 
January 30, 4:00-5:30 M-RCBG Conference Room, Belfer 503

Credit Rating Agencies, such as Fitch Ratings, Moody’s Investors Services, and S&P Global Ratings, play an important role as information intermediaries in the credit and capital markets. But what exactly are Rating Agencies, why do they exist, and how do they operate? What role did the Rating Agencies play in the Global Financial Crisis and how has the way they operate and are regulated changed since? What does the future hold for Rating Agencies in a world of Big Data and AI? 

This Study Group will explore these and related other questions, drawing on Paul Sheard’s experience working as chief economist and a senior executive at a major Rating Agency from 2012 to 2018. Study Group handout here. 

Paul Sheard is a veteran central bank watcher and markets economist, who has written and spoken widely on QE and unconventional monetary policies. He most recently was Vice Chairman of S&P Global, after serving as Executive Vice President and Chief Economist and earlier Executive Managing Director and Chief Economist of Standard & Poor’s Ratings Services. Previously, he held chief economist positions at Nomura Securities and at Lehman Brothers and was Head of Japan Equity Investments at Baring Asset Management. Earlier, Sheard was Lecturer in Economics at the Australian National University (ANU) and Osaka Gas International Cooperation Associate Professor of Economics at Osaka University, and was Visiting Scholar and Visiting Assistant Professor of Economics at Stanford University and Foreign Visiting Scholar at the Bank of Japan. Sheard is a member of the World Economic Forum’s Global Future Council on the New Economic Agenda (2018-2019) and was a member of the WEF’s Global Agenda Council on the International Monetary System (2010-2012). He served on committees of the Japanese Government’s Economic Deliberation Council, as an appointee of Prime Minister Ryutaro Hashimoto (1997-98) and as an appointee of Prime Minister Keizo Obuchi (1998-1999), and was a member of the oversight board of the Japanese Government’s Research Institute of Economy, Trade and Industry (2001-2006).  From 2003 to 2010, he was a non-executive director of ORIX Corporation. In 2006, Sheard was recognized by Advance as one of a 100 Leading Global Australians. Sheard is on the board of the Foreign Policy Association and is a member of the Bretton Woods Committee, the Council on Foreign Relations, and the Economic Club of New York. He speaks regularly at conferences around the world, and his views on the global economy and policy issues are frequently cited in the international press. Author or editor of four books and numerous academic articles, Sheard’s 1997 book in Japanese, Mein Banku Shihon Shugi no Kiki: Biggu Ban de Kawaru Nihongata Keiei (The Crisis of Main Bank Capitalism: How Japanese-style Management Will Change with “Big Bang”), won the Suntory-Gakugei Prize in the Economics–Politics Division. Sheard received a BA (Hons) from Monash University and a Master of Economics and PhD in Japanese Economy from the ANU. Email: paul_sheard@hks.harvard.edu