Is there a difference between solicited and unsolicited bank ratings and if so, why ?

Patrick Van Roy

No 79, Working Paper Research from National Bank of Belgium

Abstract: This paper analyses the effect of soliciting a rating on the rating outcome of banks. Using a sample of Asian banks rated by Fitch Ratings ("Fitch"), I find evidence that unsolicited ratings tend to be lower than solicited ones, after accounting for differences in observed bank characteristics. This downward bias does not seem to be explained by the fact that betterquality banks selfselect into the solicited group. Rather, unsolicited ratings appear to be lower because they are based on public information. As a result, they tend to be more conservative than solicited ratings, which incorporate both public and nonpublic information.

Keywords: Credit rating agencies; Unsolicited ratings; Selfselection; Public disclosure; Accounting transparency (search for similar items in EconPapers)
JEL-codes: G15 G18 G21 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006-03
New Economics Papers: this item is included in nep-acc, nep-fin, nep-fmk and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Is There a Difference Between Solicited and Unsolicited Bank Ratings and, If So, Why? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:200603-1

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