This paper investigates the information in corporate credit ratings from a positive and normative perspective. If ratings are to be informative indicators of credit risk they must reflect what a risk-averse investor cares about: both raw default probability and systematic risk. We find that ratings are inaccurate measures of raw default probability they are dominated as predictors of failure by...

This study proposes an information asymmetry hypothesis to examine why bank credit ratings vary among countries even when bank financial ratios remain constant. Countries are divided among those with low and high information asymmetry. The former include high-income countries, those in North America and West Europe regions, and those with strong institutional environment quality, whereas the la...

The mismatch between credit ratings of structured finance transactions and their true risks has been a source of the Global Financial Crisis which manifested in criticism of models and techniques applied by credit rating agencies (CRA). This paper provides an empirical study which assesses the historical performance of credit ratings for structured finance transactions and finds that CRAs do no...

Credit ratings affect firms’ access to capital and investment choices. We show that the identity of the credit analysts covering a firm significantly affects the firm’s rating, comparing ratings for the same firm at the same time across agencies. Analyst effects account for 30% of the within variation in ratings. Moreover, the rating biases of analysts carry through to credit spreads on the rat...

Prior studies document significant abnormal stock returns contemporaneous with ratings changes. These findings suggest that ratings changes have information content. It is commonly assumed that stock investors use ratings changes to predict future performance, but in this study we investigate the possibility that investors use ratings changes to reinterpret previously released information (i.e....

The Credit Clearing House (CCH) is a division of Dun & Bradstreet (D&B) Business Information Group's Business Credit Services. CCH functions as the arm of Business Credit Services' Product Marketing Group, dedicated to serving the risk management needs of the apparel industry by assigning credit ratings and dollar-specific credit limit recommendations. CCH has several thousand customers that us...

In order to widen the vision and visualize impact of institutions on not only economic growth as traditionally used but also Credit Ratings countries, this experiment studies correlation between these two attributes. paper, I show how we can find relationship credit ratings countries performance their institutions. study, a data set indicators institutional indicators, such property rights, jud...