We observe an intra-industry effect following a bank loan rating downgrade announcement, which differs for large and small competitors. A significant negative market reaction occurs between smaller competitors and rated firms, indicating the presence of a contagion effect; while significantly...

Purpose – This paper seeks to examine whether the market values the monitoring activity undertaken by a quality bank in the presence of a credit rating agency. Specifically, the question is asked whether the quality of a lead lending bank influences a market reaction to adverse rating...