Multiple credit ratings and liquidity creation

George Kladakis, Lei Chen and Sotirios K. Bellos

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: We examine the relationship between multiple credit rating purchases by banks and liquidity creation using a diverse sample of 486 banks from 71 countries. We show that liquidity creation is negatively associated with the number of ratings purchased by the bank, and that capital can positively moderate this relationship, allowing banks that obtain more ratings to create more liquidity.

Keywords: Banks; Rating agencies; Multiple credit ratings; Liquidity creation (search for similar items in EconPapers)
JEL-codes: G21 G24 G28 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003433

DOI: 10.1016/j.frl.2021.102313

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