Credit Risk Assessment By Rating Agencies: Standardization Versus Subjectivity
The development of the international financial market, the globalization of the financial resources and the increase of the world economic insecurity have been accompanied by the exponential rising of the corporate rating after 1980. There are three big agencies at mondial level, Moody’s, Standard&Poor’s and Fitch, which cover more than 94% of the international credit rating. The objective of this paper is to emphasize the conceptual and procedural similarities and differences of the mentioned agencies, with reference to the concepts and indicators used in the credit risk assessment. The main conclusions are: (1) the scales of risk assessment related to a security or entity used by the great rating agencies are approximately identical for the investment grade category, but they are different starting with the speculative grade category (2) the credit risk grade is based on a common standard list of risk factors.
Volume (Year): 4 (2009)
Issue (Month): 4 (december)
|Contact details of provider:|| Postal: Lucian Blaga University of Sibiu, Faculty of Economic Sciences Dumbravii Avenue, No 17, postal code 550324, Sibiu, Romania|
Phone: 004 0269 210375
Fax: 004 0269 210375
Web page: http://economice.ulbsibiu.ro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Czarnitzki, Dirk & Kraft, Kornelius, 2004. "Innovation indicators and corporate credit ratings: evidence from German firms," Economics Letters, Elsevier, vol. 82(3), pages 377-384, March.
- Eduardo Borensztein & Kevin Cowan & Patricio Valenzuela, 2013.
"Sovereign Ceilings “Lite”? The Impact of Sovereign Ratings on Corporate Ratings,"
Documentos de Trabajo
299, Centro de Economía Aplicada, Universidad de Chile.
- Borensztein, Eduardo & Cowan, Kevin & Valenzuela, Patricio, 2013. "Sovereign ceilings “lite”? The impact of sovereign ratings on corporate ratings," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4014-4024.
- Borensztein, Eduardo & Cowan, Kevin & Valenzuela, Patricio, 2013. "Sovereign Ceilings "Lite"? The Impact of Sovereign Ratings on Corporate Ratings," Working Papers 13-11, University of Pennsylvania, Wharton School, Weiss Center.
- Reinhart, Carmen & Levich, Richard & Majoni, Giovanni, 2002. "Ratings, rating agencies and the global financial system: Summary and policy implications," MPRA Paper 13249, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:blg:journl:v:4:y:2009:i:4:p:52-65. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mihaela Herciu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.