The nineties have witnessed a boom of capital flows towards emerging markets which found an abrupt end with the Asian financial crisis in 1997/98. During and after the Asian and Mexican financial crises investors complained about the inefficiency of rating agencies and blamed them for enforcing the dynamics of financial crises. Julia von Maltzan Pacheco discusses strengths and weaknesses of rating agencies within international markets of sovereign finance. She also presents policy options that focus especially on measures, which could prevent severe crises in international financial markets. An empirical study shows that rating agencies are important market players in international financial markets and that they need to improve their performance and to adapt their rating assessment constantly to the latest events.