Who Should Pay for Credit Ratings and How?
نویسندگان
چکیده
منابع مشابه
Who Should Pay for Credit Ratings and How?∗
This paper analyzes a model where investors use a credit rating to decide whether to finance a firm. The rating quality depends on the credit rating agency’s (CRA) effort, which is unobservable. We analyze optimal compensation contracts for the CRA that differ depending on whether the firm, investors or a social planner orders the rating. We find that rating errors are larger when the firm orde...
متن کاملNber Working Paper Series Who Should Pay for Credit Ratings and How?
This paper analyzes a model where investors use a credit rating to decide whether to finance a firm. The rating quality depends on the unobservable effort exerted by a credit rating agency (CRA). We analyze optimal compensation schemes for the CRA that differ depending on whether a social planner, the firm, or investors order the rating. We find that rating errors are larger when the firm order...
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ژورنال
عنوان ژورنال: Review of Financial Studies
سال: 2015
ISSN: 0893-9454,1465-7368
DOI: 10.1093/rfs/hhv127