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Ratings Since the Asian Crisis

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  • Helmut Reisen

Abstract

The increased importance of rating agencies for emerging-market finance has brought their work to the attention of a wider group of observers — and under criticism. This paper evaluates whether the importance of ratings for developing-country finance has changed since the Asian Crisis and whether rating agencies have modified the determinants for their rating decisions. It also provides an analysis on recent suggestions by the Basel Committee on Banking Supervision as these are very important for gauging the future role of sovereign ratings for foreign debt finance in developing countries. While the explanatory power of conventional rating determinants has declined since the Asian crisis, recent rating performance for Argentina and Turkey can still be qualified as lagging the markets, as variables of financial-sector strength and the endogenous effects of capital flows on macroeconomic variables seem to remain underemphasised in rating assessments. The market impact of sovereign ... L’importance accrue des agences de notation pour les marchés financiers des pays émergents a attiré l’attention d’un groupe élargi d’observateurs — et suscité des critiques. Ce document cherche à déterminer si l’influence des notations pour les capitaux des pays en développement a évolué depuis la crise asiatique et si les agences ont ou non modifié leurs critères de notation. Ce texte propose aussi une analyse des dernières propositions du Comité de Bâle sur le contrôle bancaire, déterminantes pour apprécier le rôle futur des notations du risque pays dans le financement des pays en développement par la dette extérieure. Alors que les critères classiques de notation ont perdu de leur pouvoir explicatif depuis la crise asiatique, les dernières notations de l’Argentine et de la Turquie semblent encore suivre l’évolution des marchés, dans la mesure où les variables du dynamisme du secteur financier et les effets endogènes des flux de capitaux sur les variables macro-économiques ...

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  • Helmut Reisen, 2003. "Ratings Since the Asian Crisis," OECD Development Centre Working Papers 214, OECD Publishing.
  • Handle: RePEc:oec:devaaa:214-en
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    File URL: http://dx.doi.org/10.1787/746001826505
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    References listed on IDEAS

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    Cited by:

    1. Marwan Elkhoury, 2007. "Credit Rating Agencies And Their Potential Impact On Developing Countries," UNCTAD Discussion Papers 186, United Nations Conference on Trade and Development.
    2. Marcus Noland, 2005. "Popular Attitudes, Globalization and Risk," International Finance, Wiley Blackwell, vol. 8(2), pages 199-229, August.
    3. Martínez, Juan & Santiso, Javier, 2003. "Financial Markets and Politics: The Confidence Game in Latin American Emerging Economies," MPRA Paper 12909, University Library of Munich, Germany.
    4. Laura E. Kodres & Kristian Hartelius & Kenichiro Kashiwase, 2008. "Emerging Market Spread Compression; Is it Real or is it Liquidity?," IMF Working Papers 08/10, International Monetary Fund.
    5. Ffrench-Davis, Ricardo, 2010. "Macroeconomics for development: from financierism" to "productivism""," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    6. Mora, Nada, 2006. "Sovereign credit ratings: Guilty beyond reasonable doubt?," Journal of Banking & Finance, Elsevier, vol. 30(7), pages 2041-2062, July.
    7. Ocampo, José Antonio, 2003. "Capital-account and counter-cyclical prudential regulations in developing countries," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1796, December.
    8. José Ocampo, 2007. "The Instability and Inequities of the Global Reserve System," International Journal of Political Economy, Taylor & Francis Journals, vol. 36(4), pages 71-96.
    9. Ffrench-Davis, Ricardo, 2003. "Financial crisis and national policy issues: an overview," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1785, December.
    10. Ilene GRABEL, 2004. "Trip Wires And Speed Bumps: Managing Financial Risks And Reducing The Potential For Financial Crises In Developing Economies," G-24 Discussion Papers 33, United Nations Conference on Trade and Development.
    11. Ricardo Ffrench-Davis, 2008. "From Financieristic To Real Macroeconomics: Seeking Development Convergence In Ees," Working Papers wp272, University of Chile, Department of Economics.
    12. Sebastián Nieto Parra & Javier Santiso, 2008. "Wall Street and Elections in Latin American Emerging Economies," OECD Development Centre Working Papers 272, OECD Publishing.
    13. Helmut Reisen & Martin Grandes & Nicolas Pinaud, 2005. "Macroeconomic Policies: New Issues of Interdependence," OECD Development Centre Working Papers 241, OECD Publishing.
    14. Eduardo Borensztein & Patricio A Valenzuela & Kevin Cowan, 2007. "Sovereign Ceilings “Lite”? The Impact of Sovereign Ratings on Corporate Ratings in Emerging Market Economies," IMF Working Papers 07/75, International Monetary Fund.
    15. Stephany Griffith-Jones, 2014. "Pour une libéralisation prudente du secteur financier : implications en matière de politique économique," Revue d’économie du développement, De Boeck Université, vol. 22(2), pages 81-112.

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