Did the Role and the Power of the Credit Rating Agencies Change over the Basel I, Basel II and Basel III Agreements?

In this paper, we study the relationship between the long-standing rating system of the credit rating agencies that has become essential overtime, and another system, which needs to ensure its own legitimacy with controls based on ratings or comparisons, the Basel agreements. The three traditional locks – intermediation, regulation, compartmentalization – which served to safeguard national and international finance, have disappeared and the 3 D revolution (disintermediation, deregulation, de-compartmentalization) together with dematerialization, led to a dramatic increase of global finance. The ensuing serious imbalances have required ongoing monitoring and enforcement of prudential rules. These rules, difficult to build from scratch and to implement, benefited from the existence of rating agencies. In this article we seek to determine how rating agencies have developed and increased their power through the establishment of the successive agreements Basel I, Basel II and Basel III.