Showing 1 - 10 of 386
studies the credit rating crisis of 2007-2008 and in particular describes the collapse of the credit ratings of ABS CDOs …
Persistent link: https://www.econbiz.de/10013152566
We analyze a model where investors use a credit rating to decide whether to finance a firm. The rating quality depends … on unobservable effort exerted by a credit rating agency (CRA). We study optimal compensation schemes for the CRA when a … planner, the firm, or investors order the rating. Rating errors are larger when the firm orders it than when investors do (and …
Persistent link: https://www.econbiz.de/10013084208
This paper explores the economic role credit rating agencies play in the corporate bond market. We consider three … existing theories about multiple ratings: information production, rating shopping and regulatory certification. Using … differences in rating composition, default prediction and credit spread changes, our evidence only supports regulatory …
Persistent link: https://www.econbiz.de/10013156427
We examine whether credit rating agencies reward accurate or biased analysts. Using data collected from Moody … as likely to get promoted. Further, analysts whose rating changes are more informative to the market are more likely to …
Persistent link: https://www.econbiz.de/10012985593
Many identify inflated credit ratings as one contributor to the recent financial market turmoil. We develop an equilibrium model of the market for ratings and use it to examine possible origins of and cures for ratings inflation. In the model, asset issuers can shop for ratings -- observe...
Persistent link: https://www.econbiz.de/10012757842
interest of Credit Rating Agencies (CRAs). We model both the CRA conflict of understating credit risk to attract more business … (conditional on the same equilibrium CRA rating policy) than having a monopoly CRA, in terms of both total ex-ante surplus and … payments for rating services (before CRAs propose a rating to the issuer) combined with mandatory disclosure of any rating …
Persistent link: https://www.econbiz.de/10012757875
For decades credit rating agencies were viewed as trusted arbiters of creditworthiness and their ratings as important …
Persistent link: https://www.econbiz.de/10013056865
We examine whether rating agencies (Moody's, S&P, and Fitch) reward large issuers of mortgage-backed securities, who …
Persistent link: https://www.econbiz.de/10013122218
We study the interaction of search and application approval in credit markets. We combine a unique dataset, which details search behavior for a large sample of mortgage borrowers, with loan application and rejection decisions. Our data reveal substantial dispersion in mortgage rates and search...
Persistent link: https://www.econbiz.de/10013296771
The credit rating industry has historically been dominated by just two agencies, Moody's and S&P, leading to … longstanding legislative and regulatory calls for increased competition. The material entry of a third rating agency (Fitch) to the … ratings market. Increased competition from Fitch coincides with lower quality ratings from the incumbents: rating levels went …
Persistent link: https://www.econbiz.de/10013137613