Do solicitations matter in bank credit ratings? Results from a study of 72 countries

Winnie P.H. POON, Junsoo LEE, Benton E. GUP

Research output: Journal PublicationsJournal Article (refereed)

31 Citations (Scopus)

Abstract

Would the credit ratings of unsolicited banks be higher if they were solicited? Alternatively, would the credit ratings of solicited banks would be lower if they were unsolicited? To answer these questions, we use an endogenous regime-switching model and data from 460 commercial banks in 72 countries, excluding the United States, for the period 1998–2003. The answer to both questions is yes. Our results show that the observed differences between solicited and unsolicited ratings can be explained by both the solicitation status and financial profile of the banks. This finding is a new contribution to the literature.
Original languageEnglish
Pages (from-to)285-314
Number of pages30
JournalJournal of Money, Credit and Banking
Volume41
Issue number2-3
DOIs
Publication statusPublished - 1 Mar 2009

Fingerprint

Credit rating
Bank credit
Commercial banks
Rating
Regime-switching model

Keywords

  • NRSROs
  • banks
  • credit rating
  • unsolicited

Cite this

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Do solicitations matter in bank credit ratings? Results from a study of 72 countries. / POON, Winnie P.H.; LEE, Junsoo; GUP, Benton E.

In: Journal of Money, Credit and Banking, Vol. 41, No. 2-3, 01.03.2009, p. 285-314.

Research output: Journal PublicationsJournal Article (refereed)

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