Discuss strategies that would reduce these conflicts of interest.

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There is a debate on conflicts of interest that exist between certain bond ratings agencies, such as Moody`s and Standard & Poor`s, and the corporation`s bonds that they rate. There is also a debate on conflicts of interest that exist between financial firms, such as Goldman Sachs and J.P. Morgan, and the corporation`s equity that rate. Discuss strategies that would reduce these conflicts of interest.
Read “Related to bond rating conflicts of interest” and “Related to equity rating conflicts of interest” on the Module 4: Lecture Materials & Resources page.
Related to bond ratings conflict of interest:
William Harrington attacks agencies for being paid by banks and companies they are supposed to rate objectively. Ratings agencies suffer `conflict of interest`, says former Moody`s boss. (2011, August 22). Retrieved from https://www.theguardian.com/business/2011/aug/22/ratings-agencies-conflict-of-interest (Links to an external site.)
Jiang, J. X., Stanford, M. H., & Xie, Y. (2012). Does it matter who pays for bond ratings? Historical evidence. Journal of Financial Economics, 105(3), 607-621. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.363.3392&rep=rep1&type=pdf (Links to an external site.)
Just read the abstract, introduction, and conclusion
Baker, D. (2020, February 6). There is a simple solution to the conflict of interest of bond rating agencies. Center for Economic and Policy Research. Retrieved from https://www.cepr.net/there-is-a-simple-solution-to-the-conflict-of-interest-of-bond-rating-agencies/ (Links to an external site.)
Related to equity ratings conflicts of interest:
Wayne Duggan writes the quickest way for an analyst to lose access to company management is to assign a “sell” rating. Stock analysts are more biased than you think. (2017, August 10). Retrieved fromhttps://money.usnews.com/investing/investing-101/articles/2017-08-10/stock-analysts-are-more-biased-than-you-think (Links to an external site.)
The Economist writes that see-side share analysis is wrong. (2016, December 1st). Retrieved from https://www.economist.com/finance-and-economics/2016/12/01/sell-side-share-analysis-is-wrong (Links to an external site.)
Stephen D. Simpson explains buy-side versus sell-side analysts. (2018, January 22). Retrieved from https://www.investopedia.com/articles/financialcareers/11/sell-side-buy-side-analysts.asp

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