The case for a European rating agency: Evidence from the Eurozone sovereign debt crisis

Marc Altdörfer, Carlos A. De las Salas Vega, Andre Guettler and Gunter Löffler

Journal of International Financial Markets, Institutions and Money, 2019, vol. 58, issue C, 1-18

Abstract: Politicians frequently voice that European bond issuers would benefit from the presence of a Europe-based rating agency. We take Fitch as a prototype for such an agency. With its ownership structure and a headquarter in London, Fitch is more European than Moody’s and S&P; during the Eurozone sovereign debt crisis, it also issued more favorable ratings. Fitch’s rating actions, however, were largely ignored by the bond market. Our results thus cast doubt on the benefits of a European credit rating agency.

Keywords: Credit rating agencies; Sovereign debt crisis; Eurozone; Home bias (search for similar items in EconPapers)
JEL-codes: F65 G01 G14 G18 G24 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:58:y:2019:i:c:p:1-18

DOI: 10.1016/j.intfin.2018.09.004

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