We compare the stability and timeliness of credit ratings produced by a traditional issuer-paid rating agency (Moody's Investors Service) and a subscriber-paid rater (Rapid Ratings). Moody's ratings exhibit less volatility but are slower to identify default risk. We control for Moody's aversion...

We document a significant relationship between ratings fees and credit rating levels in the municipal bond market. In contrast to prior evidence from the corporate bond and structured finance markets indicating a “pay to play” phenomenon, our results suggest that ratings fees in the...

We test whether ratings are comparable across asset classes over a 30-year sample. We examine default rates by initial rating, accuracy ratios, migration metrics, instantaneous upgrade and downgrade intensities, and rating changes over bonds' entire lives in multivariate regressions. These...

A common belief held among researchers and policymakers is that regulatory reliance has inflated market demand for credit ratings, despite their decreasing informational value. Advances in information technology, coupled with reputation losses following the subprime crisis, renew the question of...

We test the hypothesis that financial institutions and other regulated institutional investors benefit from relatively uninformative credit ratings. Using credit ratings without regulatory implications as a benchmark, we show that Moody's certifies riskier bonds as investment grade. This...