Sovereign rating actions: Is the criticism justified?

Intereconomics

Volumn 46, Issue 5, 2011, Pages 248-253

  Gwilym, Owain Ap ^a   Alsakka, Rasha ^a  

^a NONE

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EID: 80053940109     PISSN: 00205346     EISSN: 1613964X     Source Type: Journal    
DOI: 10.1007/s10272-011-0389-0     Document Type: Note

References (13)

1. E.g. see J. Mathis, J. McAndrews, J.-C. Rochet: Rating the raters: Are reputation concerns powerful enough to discipline rating agencies?, in: Journal of Monetary Economics, Vol. 56, No. 8, 2009, pp. 657-674.
2. Some criticisms related to CRAs' confl icts of interest and the potential for assignment of generous ratings due to the "issuer pays" model are therefore not relevant here.
3. Bank of England: Whither the credit ratings industry?, Financial Stability Paper, No. 9, 2011.
4. G. Löffler: Avoiding the rating bounce: Why rating agencies are slow to react to new information, in: Journal of Economic Behavior and Organization, Vol. 56, 2005, pp. 365-381.
5. E.g. see A. Afonso, D. Furceri, P. Gomes: Sovereign credit ratings and financial markets linkages - Application to European data, European Central Bank, working paper, No. 1347, June 2011
6. R. Al - sakka, O. ap Gwilym: Rating agencies' signals during the European sovereign debt crisis: Market impact and spillovers, Bangor Business School, working paper, 2011.
7. E.g. see IMF: The uses and abuses of sovereign credit ratings. IMF Global financial stability report: Sovereigns, funding, and systemic liquidity, 2011.
8. Financial Stability Board: Principles for reducing reliance on CRA ratings, 2010.
9. House of Lords: Sovereign credit ratings: Shooting the messenger?, European Union Committee, 21st Report of Session 2010-12, HL Paper 189, London, UK, 2011.
10. We provide further specific evidence on the general validity of this point in the next section.
11. A. Afonso, P. Gomes, P. Rother: Short- and long-run determinants of sovereign debt credit ratings, in: International Journal of Finance and Economics, Vol. 16, No. 1, 2011, pp. 1-15.
12. Standard & Poor's: Sovereign government rating methodology and assumptions, 30 June 2011.
13. Related evidence for all sovereigns can be found in R. Alsakka, O. ap Gwilym: Leads and lags in sovereign credit ratings, in: Journal of Banking and Finance, Vol. 34, No. 11, 2010, pp. 2614-2626.