Several rating agencies such as Standard & Poor's (S&P), Moody's and Fitch Ratings have evaluated firms’ credit rating. Since lots of fees are required by the agencies and sometimes the timely default risk of the firms is not reflected, it can be helpful for stakeholders if the credit ratings can be predicted before the agencies publish them. However, it is not easy to make an accurate predicti...

Rating collateralised debt obligations (CDOs), which are based on tranched pools of credit risk exposures, does not only require attributing a probability of default to each obligor within the portfolio. It also involves assumptions concerning recovery rates and correlated defaults of pool assets, thus combining credit risk assessments of individual collateral assets with estimates about defaul...

Performance evaluations and rankings have become all pervasive. Rating agencies are evaluating countries and banks, consulting agencies are assessing the performance of companies, human resource offices are evaluating their workers. The evaluation culture has invaded all aspects of our life; only evaluators appear to have escaped this evaluation frenzy. Historians will perhaps remember the star...

Sovereign debt ratings provided by rating agencies measure the solvency of a country, as gauged lender or an investor. It is indication risk involved in investment and should be determined correctly well-timed manner. The current system lacking transparency criteria mechanism. present study reconstructs sovereign through logical analysis data (LAD), which based on theory Boolean functions. orga...

In the financial markets, for investors, lenders, and issuers, credit rating agencies (CRAs) have a critical part in reducing asymmetry of information between various parties. Credit ratings allow us to recognize impending region's individuals. The paper clearly describes role played establishment nation by agencies; there is rise new start-ups as all investors are rated favorably. Banks helpin...

This paper empirically analyzes the effect of competition on rating quality under the "issuerpay" compensation scheme. Using hand-collected data of collateralized debt obligations (CDOs), we specify the competition among credit rating agencies with a discrete game framework and test its influence on the rating quality. We find that competition raised the probability of choosing lenient rating b...

This paper considers the social welfare implications of having a public rating agency in-stead of private sector credit rating agencies. The public rating agency is assumed to pay a fix compensation rather than a performance sensitive compensation and is assumed to dismiss its employee in case of "misconduct." The model predicts that the public rating agency may be socially beneficial if invest...

We show that sovereign debt impairments can have a significant impact on financial markets and real economies through a credit ratings channel. Specifically, we find that firms reduce their investment and reliance on credit markets due to a rising cost of debt capital following a sovereign rating downgrade. We identify these effects by exploiting exogenous variation on corporate ratings due to ...