∗This paper is based on a chapter of my PhD thesis. I would like to thank my advisor Hyun Shin, Max

This paper examines to what extent reputational concerns give rating agencies incen-tives to reveal information and how this is affected by competition in the ratings industry. In a simple model in which a rating agency can make mistakes and has public and private information about a project, ratings might not reflect private information and can even contradict public information in an attempt to minimize reputational costs. A monopo-listic rating agency can act conservatively by issuing more bad ratings than justified by both types of information, whereas in a competitive setting, a rating agency can become bold by issuing more good ratings than justified by both types of information. Ratings can be more accurate in a monopoly than with competition depending on the strength of public information, but the industry structure ceases to affect accuracy when the quality of private information is high or when reputational concerns are weak