Erschienen in:Harvard Business School Finance Working Paper ; No. 09-051
Umfang:
1 Online-Ressource (49 p)
Sprache:
Ohne Angabe
DOI:
10.2139/ssrn.1278150
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 21, 2010 erstellt
Beschreibung:
The credit rating industry has historically been dominated by just two agencies, Moody's and Samp;P, leading to longstanding legislative and regulatory calls for increased competition. The material entry of a third rating agency (Fitch) to the competitive landscape offers a unique experiment to empirically examine how in fact increased competition affects the credit ratings market. Increased competition from Fitch coincides with lower quality ratings from the incumbents: rating levels went up, the correlation between ratings and market-implied yields fell, and the ability of ratings to predict default deteriorated. We offer several possible explanations for these findings that are linked to existing theories