Several challenges in making CRAs financially liable to investors: Experts

Many experts still feel imposing litigation risk, along with reputational risk, will help discipline CRAs better

Even as legal and regulatory experts mull over the need to impose civil liability over credit rating agencies (CRAs), the experience of several countries in this regard has been mixed. 

“It is difficult to hold credit rating agencies liable for mistakes they have been making,” says Matthias Lehmann, director, Institute of Private International and Comparative Law, University of Bonn, Germany. Lehmann says it not easy for investors to prove — without full access to rating methodology — that the rating agency has committed a mistake. It is equally difficult for an investor to prove that the damages suffered were because