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te bonds in USA. The investors interested to invest in these corporate bonds were very skeptical about risk involved as they were not provided with company's credit information that issued these bonds. So there was a pressing need for an independent and third party institution to analyze credit risk of these bonds which helped the investors in making decision to invest according to their criteria. Thus credit rating agencies came into existence. (Ruth Rudden, 2007),

John moody was the first to introduce credit ratings in 1909. He used rating scale to rate the bonds. These ratings were useful for investors to understand credit risks. Credit rating agencies (CRAs) stressed more on expected cash flow generated by the issuer (special purpose vehicle) ongoing business in determining the rating. In general CRAs revenues were generated from subscribes who subscribed to receive rating on debt securities. Rating agencies from the start has been rating bonds on specific scale. Mason and Rosner, concluded that the rating doesn't give information on whether particular bonds must be bought or sold. They give their opinion on relative safety of the bonds. (Mason and Rosner, 2007)

The main importance for the credit ratings rose in the capital market because of US treasury department. US treasury department said the quality of the bonds rated by rating agencies is appropriate. Ruth Rudden, concluded that the importance of credit rating agencies in the capital market became prominent and the investors relayed on these ratings to invest on the bonds. (Ruth Rudden, 2007)

Then with the introduction of new structure finance products, rating agencies started to rate these products as well. In one of the reports by the Committee on the Global Financial System, (2005), wrote about the Rating agencies, rated the structured finance products like asset backed securities, CDOs, RMSBs etc, same as the traditional bonds. Rating agencies performed the same function as with traditional bonds that was reducing information asymmetries between issuers and investors. Committee on the Global Financial System, (2005)

Issuers of structured finance products wanted these securities to be rated on the same scale as traditional bonds so that investors think structured finance has same kind of risk that of bonds. (Mason and Rosner, 2007) spoke about the structured finance as, for past few years with the introduction of newly formed structure finance products; these CRAs are chasing the agencies that issue these structured finance products instead of subscribers for revenue.

This lead to three fold increase in the revenues by CRAs and effected the integrity and base source of the aim on which rating industries are build. To meet the demand of these newly introduced structured finance products; CRAs have introduced many new models and approaches to access these products for ratings. (Mason and Rosner, 2007) The three largest credit rating agencies with overseas market that are based in United States are Moody's, Standard and Poor (“S&P”) and Fitch.

2.2.2 Rating methodologies of RMBS

According to (Rousseau Stephane, 2009), all the rating agencies methodologies are almost same for本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。