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Credit Rating Agencies: An Overview

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  • Lawrence J. White

    (Kaufman Management Center, Stern School of Business, New York University, New York, NY 10012)

Abstract

Credit rating agencies (CRAs) play a central role in the debt (bond) markets of many countries. CRAs have also attracted a considerable amount of public and policy attention during the past decade, especially with respect to their role in the financial crisis of 2008–2009 and their role in the more recent Eurozone difficulties. This article provides an overview of the CRAs: who they are, what they do, how their centrality to the financial markets came about, what their role in the financial crisis was, and the important aspects of the policy measures that have affected the CRAs.

Suggested Citation

  • Lawrence J. White, 2013. "Credit Rating Agencies: An Overview," Annual Review of Financial Economics, Annual Reviews, vol. 5(1), pages 93-122, November.
    • Handle: RePEc:anr:refeco:v:5:y:2013:p:93-122
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. In Search of Better Credit Assessments
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2014-09-18 17:28:35

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    Cited by:

    1. Lawrence J. White, 2016. "Credit Rating Agencies: An Analysis Through the Lenses of Industrial Organization, Finance and Regulation," Pacific Economic Review, Wiley Blackwell, vol. 21(2), pages 202-226, May.
    2. Lawrence J. White, 2019. "Using The Tools of Industrial Organisation to Illuminate The Credit Rating Industry," The Japanese Economic Review, Springer, vol. 70(3), pages 367-374, September.
    3. Dimitar Rafailov, 2020. "Regulation of Credit Rating Agencies - Different Views and Solutions," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 9(2), pages 13-22, August.
    4. Afik, Zvika & Zabolotnyuk, Yuriy, 2023. "Information effect of credit rating announcements in transition economies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).
    5. John Ammer & John H. Rogers & Gang Wang & Yang Yu, 2022. "Visible Hands: Professional Asset Managers' Expectations and the Stock Market in China," International Finance Discussion Papers 1362, Board of Governors of the Federal Reserve System (U.S.).
    6. Dang, Man & Puwanenthiren, Premkanth & Jones, Edward & Nguyen, Thieu Quang & Vo, Xuan Vinh & Nadarajah, Sivathaasan, 2022. "Strategic archetypes, credit ratings, and cost of debt," Economic Modelling, Elsevier, vol. 114(C).
    7. Jaspreet Kaur & Madhu Vij & Ajay Kumar Chauhan, 2023. "Signals influencing corporate credit ratings—a systematic literature review," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 50(1), pages 91-114, March.
    8. Itay Goldstein & Chong Huang, 2020. "Credit Rating Inflation and Firms' Investments," Journal of Finance, American Finance Association, vol. 75(6), pages 2929-2972, December.
    9. repec:mth:ijafr8:v:9:y:2019:i:1:p:209-228 is not listed on IDEAS
    10. Lawrence J. White, 2019. "Using the Tools of Industrial Organization to Illuminate the Credit Rating Industry," Working Papers 19-02, New York University, Leonard N. Stern School of Business, Department of Economics.
    11. Xiaoyang Zhuo & Guangli Xu & Yongjin Wang, 2017. "The Issuer-pays Business Model and Competitive Rating Market: Rating Network Structure," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 216-241, August.
    12. Chatoro, Marian & Mitra, Sovan & Pantelous, Athanasios A. & Shao, Jia, 2023. "Catastrophe bond pricing in the primary market: The issuer effect and pricing factors," International Review of Financial Analysis, Elsevier, vol. 85(C).
    13. Canale, Rosaria Rita & De Simone, Elina & Spagnolo, Nicola, 2021. "Financial markets and fiscal discipline in the Eurozone," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 490-499.
    14. Hossain, Ashrafee & Hossain, Takdir & Jha, Anand & Mougoué, Mbodja, 2023. "Credit ratings and social capital," Journal of Corporate Finance, Elsevier, vol. 78(C).
    15. Heidrun Hoppe-Wewetzer & Christian Siemering, 2022. "Advertisement-financed credit ratings," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(1), pages 188-206, January.
    16. Anna Bayona & Oana Peia & Razvan Vlahu, 2023. "Credit Ratings and Investments," Working Papers 776, DNB.
    17. Helmut Wasserbacher & Martin Spindler, 2024. "Credit Ratings: Heterogeneous Effect on Capital Structure," Papers 2406.18936, arXiv.org.
    18. Klooster, Jens van 't & van Tilburg, Rens, 2020. "Targeting a sustainable recovery with Green TLTROs," SocArXiv 2bx8h_v1, Center for Open Science.
    19. deHaan, Ed & Li, Jiacui & Watts, Edward M., 2023. "Retail bond investors and credit ratings," Journal of Accounting and Economics, Elsevier, vol. 76(1).
    20. Jiang, Fuxiu & Wang, Weiyi & Zheng, Xiaojia, 2024. "Board chair and credit rating of family firms: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).
    21. van 't Klooster, Jens & van Tilburg, Rens, 2020. "Targeting a sustainable recovery with Green TLTROs," SocArXiv 2bx8h, Center for Open Science.

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    More about this item

    Keywords

    credit rating agencies; nationally recognized statistical rating organization (NRSRO); financial regulation; financial crisis; Dodd-Frank Act;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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