In this staff report, the Committee on Capital Markets Regulation (the “Committee”) evaluates the performance of the credit rating agencies during the COVID-19 crisis. The report concludes that the agencies responded to evolving market and economic conditions promptly and performed their role well as independent providers of forward-looking information.

The report proceeds as follows. Section 1 provides a brief overview of credit rating agencies and the actions that they have taken during COVID-19. Section 2 reviews the timeline of the credit rating agencies’ actions, finding that the agencies issued prompt revisions once the severity of the COVID-19 crisis became apparent. Section 3 examines the agencies’ debt ratings and finds that pre-COVID ratings appear to have been accurate insofar as the riskiest levels of debt have received the majority of downgrades and accounted for nearly all defaults. Section 4 then examines agencies’ actions by sector and finds that they accurately revised their forward-looking ratings based on evolving market conditions. Section 5 sets forth conclusions.

The report can be accessed here.