An Introduction to the Public Sector Model

The idea of a public sector credit rating agencycredit rating agencies has been flirted with on multiple occasions due to the perceived shortcomings of the existing credit rating industry. Multiple feasibilityfeasibility studies have been carried out on the prospects of these public sector rating agencies; however, most of these projects have failed to come to fruition. This chapter begins by exploring the public sector concept and unpacking some of the different attempts to create a public sector rating agency. We then examine why most of these attempts have failed and subsequently introduce the public sector SME credit ratingSME credit rating model, which has been largely successful. The public sector SME rating model is a fairly opaque concept outside of the public sector industry in EuropeEurope; however, this chapter intends to bring readers up to speed with the concept and increase the overall awareness of this impactful value proposition (One of the reasons why it has remained opaque is the limited literature on the SME credit ratingSME credit rating concept and even less information on the public sector model).