Being a systemically important financial institution may lead to lower financing costs, often referred to as a "borrowing subsidy". Existing studies on determining financing subsidies are limited and have several shortcomings: they either use ordinal scaled ratings to measure the rating bonus of...

This paper analyzes if the so called home country bias exists in sovereign ratings: Home country bias could be due to the fact that a rating agency applies higher ratings to a country with which the country where the rating agency is located has stronger relations. For the analysis of a...

This paper analyzes if and what kind of sovereign rating bias exists. We analyze three possible biases. Firstly, rating agencies may have the incentive to rate countries where they earn more money better compared to countries where they earn less (profit maximizing bias). Secondly, different...

This paper analyzes by using a simple theoretical model and thereafter testing empirically the differences between Euro- and US-Dollar nominated sovereign bonds of euro-area countries during the euro-crisis and concludes that the probability of collapse of the Euro(-currency) has a significant...

The intensity of the Euro-crisis was reflected by significant increases of sovereign bond yields in the troubled countries. This has launched a hot debate whether this increase can solely be attributed to fundamental factors like e.g. rescue programmes, rising budget deficits, deteriorating...

The intensity of the Euro-crisis was reflected by significant increases of sovereign bond yields in the troubled countries. This has launched a hot debate whether this increase can solely be attributed to fundamental factors like e.g. rescue programmes, rising budget deficits, deteriorating...