Credit rating agencies formulate publicly available opinions on the capacity and willingness of debtors to repay debts. By doing so, they reduce the information asymmetry between creditors and borrowers. Owing to regulatory efforts commenced in recent years, credit rating processes have become...

This paper investigates the reaction of credit default swaps spreads to changes in rating class, outlook, and watchlist entries for sovereigns. We find a stronger response to negative outlook and watchlist changes than for actual rating class downgrades, which shows that negative outlook and...

This paper describes and evaluates "shadow" sovereign credit ratings, which represent the credit ratings of countries that are not rated by credit rating agencies. Credit ratings represent the creditworthiness of companies or governments. They are important in attracting foreign capital....

Credit rating agencies are frequently criticized for producing biased sovereign ratings. This article discusses how the home country of rating agencies could affect rating decisions as a result of political economy influences and cultural distance. Using data from nine agencies based in six...

Credit rating agencies are frequently criticized for producing sovereign ratings that do not accurately reflect the economic and political fundamentals of rated countries. This article discusses how the home country of rating agencies could affect rating decisions as a result of political...

Credit rating agencies are frequently criticized for producing sovereign ratings that do not accurately reflect the economic and political fundamentals of rated countries. This article discusses how the home country of rating agencies could affect rating decisions as a result of political...

The sovereign credit ratings provided by credit rating agencies have great impact on a country's access to credit markets. To gain access to international credit markets, a country usually seeks ratings from the three biggest international credit rating agencies: Standard & Poor's, Moody's, and...

This paper investigates the importance of having a sovereign credit rating for a country's financial development. After controlling for endogeneity and selection bias, we compare different aspects of the financial sector and the capital markets of recently rated countries with otherwise similar,...

This paper empirically examines the determinants of sovereign credit ratings using panel data of a sample of 86 countries for 1993-2013. It further investigates whether the countries' average credit rating differs for crisis and non-crisis periods, as well as for the different regions where the...

We show that sovereign debt impairments can have a significant impact on financial markets and real economies through a credit ratings channel. Specifically, we find that firms reduce their investment and reliance on credit markets due to a rising cost of debt capital following a sovereign...