Rating agencies in the face of regulation

Journal of Financial Economics

Volumn 108, Issue 1, 2013, Pages 46-61

  Opp, Christian C ^a   Opp, Marcus M ^b   Harris, Milton ^c  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

^c UNIVERSITY OF CHICAGO   (United States)

Author keywords

Certification; D82; D83; Dodd Frank Act; Financial regulation; G01; G24; G28; Rating agencies

Indexed keywords

EID: 84875811662     PISSN: 0304405X     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jfineco.2012.10.011     Document Type: Article

References (45)

1. Admati A.R., Pfleiderer P. A monopolistic market for information. Journal of Economic Theory 1986, 39:400-438.
2. Admati A.R., Pfleiderer P. Selling and trading on information in financial markets. American Economic Review 1988, 78:96-103.
3. Ahmed, J., 2011. Competition in lending and credit ratings. Unpublished working paper. University of California, Berkeley.
4. Ashcraft A., Goldsmith-Pinkham P., Hull P., Vickery J. Credit ratings and security prices in the subprime MBS market. American Economic Review 2011, 101:115-119.
5. Ashcraft, A.B., Goldsmith-Pinkham, P., Vickery, J.I., 2010. MBS ratings and the mortgage credit boom. Unpublished working paper. Federal Reserve Bank of New York Staff Report No. 449.
6. Becker B., Milbourn T. How did increased competition affect credit ratings?. Journal of Financial Economics 2011, 101:493-514.
7. Benmelech E., Dlugosz J. The alchemy of CDO credit ratings. Journal of Monetary Economics 2009, 56:617-634.
8. Bolton P., Freixas X., Shapiro J. The credit ratings game. Journal of Finance 2012, 67:85-112.
9. Bond P., Goldstein I., Prescott E.S. Market-based corrective actions. Review of Financial Studies 2010, 23:781-820.
10. Bongaerts D., Cremers K.M., Goetzmann W.N. Tiebreaker. certification and multiple credit ratings. Journal of Finance 2012, 67:113-152.
11. Boot A.W.A., Milbourn T.T., Schmeits A. Credit ratings as coordination mechanisms. Review of Financial Studies 2006, 19:81-118.
12. Chen, Z., Lookman, A.A., Schürhoff, N., Seppi, D.J., 2012. Bond ratings matter: evidence from the Lehman Brothers Index rating redefinition. Unpublished working paper. Shanghai University of Finance and Economics, Chartis Lausanne, University of Lausanne, and Carnegie Mellon.
13. Cornaggia, J., Cornaggia, K., Hund, J., 2012. Credit ratings across asset classes: A≡A? Unpublished working paper. Indiana University Bloomington and Rice University.
14. Coval J.D., Jurek J.W., Stafford E. The economics of structured finance. Journal of Economic Perspectives 2009, 23:3-25.
15. Diamond D.W. Financial intermediation and delegated monitoring. Review of Economic Studies 1984, 51:393-414.
16. Diamond D.W., Rajan R.G. The credit crisis. conjectures about causes and remedies. American Economic Review 2009, 99:606-610.
17. Ellul A., Jotikasthira C., Lundblad C.T. Regulatory pressure and fire sales in the corporate bond market. Journal of Financial Economics 2011, 101:596-620.
18. Fitch, 2007. Inside the ratings. Information Brochure. Fitch.
19. Frank, B., 2008. H.R. 6308: Municipal Bond Fairness Act. Act. U.S. House of Representatives, Washington, DC.
20. Fudenberg D., Levine D., Maskin E. The folk theorem with imperfect public information. Econometrica 1994, 62:997-1039.
21. Fudenberg D., Maskin E. The Folk theorem in repeated games with discounting or with incomplete information. Econometrica 1986, 54:533-554.
22. Fulghieri, P., Strobl, G., Xia, H., 2011. The economics of unsolicited credit ratings. Unpublished working paper. University of North Carolina at Chapel Hill.
23. Griffin J.M., Tang D.Y. Did subjectivity play a role in CDO credit ratings?. Journal of Finance 2012, 67:1293-1328.
24. Grossman S.J., Hart O.D. An analysis of the principal-agent problem. Econometrica 1983, 51:7-45.
25. Harris, M., Opp, C., Opp, M.M., 2012. Bank regulation with private-party risk assessments. Unpublished working paper. University of Chicago, University of Pennsylvania, and University of California, Berkeley.
26. He, J., Qian, J., Strahan, P., 2012. Are ratings all created equal? The impact of issuer size on the pricing of mortgage-backed securities. Journal of Finance 67, 2097-2137.
27. Inderst R., Ottaviani M. Competition through commissions and kickbacks. American Economic Review 2012, 102:780-809.
28. Kartasheva, A., Yilmaz, B., 2012. Precision of ratings. Unpublished working paper. University of Pennsylvania.
29. Kisgen D.J., Strahan P.E. Do regulations based on credit ratings affect a firm's cost of capital?. Review of Financial Studies 2010, 23:4324-4347.
30. Kraft, P., 2011. Do rating agencies cater? Evidence from rating-based contracts. Unpublished working paper. New York University.
31. Kreps D.M., Milgrom P., Roberts J., Wilson R. Rational cooperation in the finitely repeated prisoners' dilemma. Journal of Economic Theory 1982, 27:245-252.
32. Kronlund, M., 2011. Best face forward: does rating shopping distort observed bond ratings?. Unpublished working paper. University of Illinois, Urbana-Champaign.
33. Krugman, P., 2010. Berating the raters. New York Times, New York edition, April 26.
34. Laffont J.J., Tirole J. Optimal bypass and cream skimming. American Economic Review 1990, 80:1042-1061.
35. Lizzeri A. Information revelation and certification intermediaries. RAND Journal of Economics 1999, 30:214-231.
36. Manso, G., 2011. Feedback effects of credit ratings. Unpublished working paper. University of California, Berkeley.
37. Mathis J., McAndrews J., Rochet J.C. Rating the raters. are reputation concerns powerful enough to discipline rating agencies?. Journal of Monetary Economics 2009, 56:657-674.
38. Opp M.M. Expropriation risk and technology. Journal of Financial Economics 2012, 103:113-129.
39. Ramakrishnan R.T.S., Thakor A.V. Information reliability and a theory of financial intermediation. Review of Economic Studies 1984, 51:415-432.
40. Rock K. Why new issues are underpriced. Journal of Financial Economics 1986, 15:187-212.
41. Sangiorgi, F., Spatt, C., 2012. Opacity, credit rating shopping and bias. Unpublished working paper. Stockholm School of Economics and Carnegie Mellon.
42. Skreta V., Veldkamp L. Ratings shopping and asset complexity. a theory of ratings inflation. Journal of Monetary Economics 2009, 56:678-695.
43. Stanton, R., Wallace, N., 2010. CMBS subordination, ratings inflation, and the crisis of 2007-2009. Unpublished working paper. University of California, Berkeley.
44. Strausz R. Honest certification and the threat of capture. International Journal of Industrial Organization 2005, 23:45-62.
45. White L.J. Markets. the credit rating agencies. Journal of Economic Perspectives 2010, 24:211-226.