The paper asks if credit rating agencies have incentives to misrepresent their clients’ credit quality during an ongoing systemic crisis. Two important elements are essential for a systemic crisis: (1) Investors are not able to distinguish fundamentally healthy debtors from fundamentally...

The impact of selected accounting rules on economic stability is analysed. Maintaining economic stability is claimed to be an important motive for regulatory intervention. In the first part of the paper, a framework for analysing the usefulness of such stabilizing intervention is proposed. There...