By utilizing a large sample of US bond issuers with ratings from Moody's, S&P, and Fitch, this paper analyses whether observed differences in average rating levels between the third agency Fitch and the mandatory agencies Moody's and S&P are due to issuers seeking only an additional rating if it is expected to give a more favorable picture of credit quality. In contrast to previous research, we...

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We develop a rational expectations model in which the issuer of a nancial instrument purchases credit ratings(s) in order to provide useful information to investors and attract investor demand. We examine the nature of a credit-rating equilibrium in a staged game in which an issuer purchases rating(s) sequentially and then decides which ratings to disclose. Our analysis emphasizes the importanc...

Numerous firms offer competing ratings of insurer financial condition. Insurance consumers, producers, and others commonly puzzle over which rating is more accurate. A 1994 Government Accounting Office (GAO) report judged the performance of a group of these insurance rating agencies. That report focused on Type I error (i.e., too high a rating on an insurer that defaults) rather than an appropr...

Country risk has become a topic of major concern for the international financial community over the last two decades. The importance of country ratings is underscored by the existence of several major country risk rating agencies, namely the Economist Intelligence Unit, Euromoney, Institutional Investor, International Country Risk Guide, Moody’s, Political Risk Services, and Standard and Poor’s...

Purpose: This study investigates the industry competitiveness problem, which plays an important role in crediting rating industry safety. Based on a comprehensive literatures review, we found that there is much room to improve regarding of competitiveness assessment in crediting rating industry. Design/methodology/approach: In this study, we propose the PCA (Principal Component Analysis) method...