Example financial markets dissertation topic 3:

Given the on-going effects of the global recession, what measures should be enacted to regulate credit rating agencies so as to minimise the potential for previous mistakes within the sector being repeated?

Advancing three interlocking hypothesises, this dissertation assess each with reference to existing academic literature upon the subject area and through the collation of primary research. First, to what extent can the credit rating agencies be blamed for giving investment grade credit ratings to toxic securities? Second, as no mathematical model exists that accurately predicts the risks inherent in such types of derivatives, is it appropriate to suggest that the credit rating agencies should not have given credit ratings to mortgage-backed securities? Third, because there was no sectoral incentive to ensure that the credit ratings given were of high quality, what regulatory measures can be enacted to safeguard against such an approach being adopted in the future?

Suggested initial topic reading:

• Ashcraft, A.B. and Schuermann, T. (2008) Understanding the securitization of subprime mortgage credit. Hanover, MA: Now Publishers Incorporated.
• Gupta, V., Mittal, R.K. and Bhalla, V.K. (2010) ‘The role of the credit rating agencies in the financial market crisis’, Journal of Development and Agricultural Economics, Vol. 7, pp. 268-276.
• Hunt, J.P. (2009) ‘Credit rating agencies and the ‘Worldwide Credit Crisis’: The limits of reputation, the insufficiency of reform, and a proposal for improvement’, Columbia Business Law Review, Vol. 1, 2009, pp. 109-209.