Some analysts say rating reports issued by various rating agencies are far more than regular reports. The agencies yield great power over companies and even countries.
Rating agency Standard & Poor’s rated bonds issued by Japan’s Yamaichi Securities as junk in July 1997. A few days later, the Japanese firm saw its share price plummet, and it eventually went bankrupt.
Standard & Poor’s lowered Thailand’s sovereign rating in September 1997. Thailand’s currency dropped over 4% on that very day, culminating in the Asian finanical crisis of 97-98.
In December 1997, Standard & Poor’s lowered the credit rating of South Korea’s sovereign bond to junk status. South Korea’s currency dropped 12%, and its stock market slumped 7.5%, the biggest one-day drop in the country’s history.
In April 2010, Standard & Poor’s lowered Greece’s sovereign rating from BBB+ to BB+. Greece's benchmark dropped 6% on that day. The subsequent Greek sovereign crisis has cost the world’s markets more than U.S.$1 trillion.