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Questions: 1.Provide 2 Australian examples of Financial Products that were issued in the last 5 years that failed where there was discussion (following the product failure) that investors were misled in relation to the credit ratings provided for the issued products. 2.Comment on the changes made by Credit ratings agencies in their ratings processes since the GFC. 3.In your opinion, have these changes gone far enough in preventing the likelihood of future product failures based on misleading credit ratings. Briefly justify your opinion. Answers: 1.Residential Mortgage Back Securities and collateralized debt obligations are examples of products that were considered as the failure since the investors were misled in regard to the credit ratings offered for the issued products. As a result of this there was a reduced needs of funding on the part of the issuers (Fong et al., 2014). The failure of Residential Mortgage Back Securities and collateralized debt obligations resulted the investors in losing some proportion of their savings related to superannuation that accounted to a loss of $25 million to $30 million. 2.Following the Global Financial Crisis, the credit rating agencies have adopted certain changes to address the failures. The credit rating agencies have public performance benchmarks scale for credit rating structured which would ultimately narrow the sophistication gap among the arrangers and investors that empowers the investors to perform their own value analysis and gauge into the false ratings. Increased amount of investors vigilance is helpful in promoting more competitive pricing strategies for higher quality debt and determine the tenacious incentives operating in the present work market. Credit rating agencies on their part will be more likely to volunteer their work so that it can accommodate greater public security. 3.Accordingly, these changes are yet to go far enough in preventing the probability of the future product failure based on the misleading credit agencies. Arguably, litigation risk is considered as the way of imposing standards on the credit rating agencies to prevent the recurrence offences. Global developments in this area seems to emphasis on the approach of discouraging the over-dependence on the ratings by the investors at the time of making investments decision. Reference list: Fong, K. Y., Hong, H. G., Kacperczyk, M. T., Kubik, J. D. (2014). Do security analysts discipline credit rating agencies?. Xia, H. (2014). Can investor-paid credit rating agencies improve the information quality of issuer-paid rating agencies?.Journal of Financial Economics,111(2), 450-468.