Rating agencies are hugely important in the global credit markets. The rating market is dominated by three global big players, Standard & Poor, S&P, and Moody's Investor Service, covers together around 80% of the rated universe. Add Fitch Ratings to that, and they cover together 95% of the global rated market. The rating scales for the global credit rating agencies are shown at the right hand side of the screen. Important to remember here, of course, is the distinction between investment grade credits and speculative grade credits. Speculative grade credits are also known as non-investment grade or junk. S&P draws the line between BBB- as the lowest investment grade rating, and BB+ as the highest speculative grade rating. The distinction between investment grade and speculative grade is of course extremely important because historically, investment grade bonds were the only bonds a bank could hold, given their highly geared balance sheet. Also, in many jurisdictions, pension managers and other asset managers can only invest in investment grade credits. The views of rating agencies are important, ratings determine how regulators look at credit worthiness, and it also decides how central banks and other banks view potential collateral instruments. Credit ratings are a reflection of relative default risks and it's important to remember that those default risks increase non-linearly as credit worthiness declines. So credit worthiness for speculative grade bonds is significantly worse than that of investment grade bonds. There are many ways to describe the difference in yield between risk-free treasury bonds and risky credits. One way is to look at the nominal credit spread, which is the difference in yield maturity between a non-treasury item, a risky credit, and a treasury security of the same duration. Of course, this slide here shows an example only. However, as we can see on the slide, yields tend to be higher the longer the maturity of all bonds, risky and risk free. So we tend to see an upward sloping yield curve. However, of course, the shape of the yield curve does vary and indeed the size of the credit spread also varies across time. In uncertain times, we tend to see higher credit spreads as investors are afraid of the risk and move into government bonds. While in bull markets or times of low economic uncertainty, we tend to see a narrower spread, so where credit improvement on one issue will lead to a narrowing of the spread and vice versa.