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Split credit ratings of banks in times of crisis

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journal contribution
posted on 14.02.2022, 11:57 authored by Surraya Rowe
This paper analyses whether opacity of bank creditworthiness increases during crisis periods and if the conservativeness of CRAs changes through business cycles. Univariate and multivariate methodologies are used:data from Moody’s and S&P on credit ratings and watch status for 133 commercial banks across 17 developed countries from 2007 to 2015 is employed.The univariate analysis is a unique technique that provides a new perspective to assess whether splits between CRAs are defined as permanent or temporary. The evidence demonstrates that Moody’s and S&P frequently disagree. S&P is shown to be the more conservative CRA overall, however, the extent to which Moody’s issues higher ratings decreases over time until it becomes the more conservative CRA. The paper is the first of its kind to establish that the conservativeness of Moody’s and S&P changes throughout business cycles, which should impact on the strategic decision making of investors

History

Published in

International Journal of Banking, Accounting and Finance

Publisher

Inderscience

Version

AM (Accepted Manuscript)

Citation

Rowe, S. (2020) 'Split credit ratings of banks in times of crisis', International Journal of Banking, Accounting and Finance, 11(2), pp.254-280

Print ISSN

1755-3830

Electronic ISSN

1755-3849

Cardiff Met Affiliation

  • Cardiff School of Management

Cardiff Met Authors

Surraya Rowe

Cardiff Met Research Centre/Group

  • Welsh Centre for Business and Management Research

Copyright Holder

© The Publisher

Language

en