Are Sovereign Credit Ratings Pro-Cyclical? A Controversial Issue Revisited in Light of the Current Financial Crisis Abstract: With the present work I aim to shed new light on the debate on possible pro-cyclicality of the foreign sovereign credit ratings issued by credit rating agencies (CRAs), considering their behavior in the current financial crisis. I find that the assumption of a pro-cyclical behavior of CRAs appears to be groundless when referring to the period 2001-2011. Actually, even though the ratings issued throughout the pre-crisis period (2001-2006) are generally higher than the predicted ones, there is no evidence of CRAs assigning unduly worse ratings during the years of the crisis (2007-2011)

Paolo Giacomino ()
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Paolo Giacomino: Rome University 'Tor Vergata'

Rivista di Politica Economica, 2013, issue 4, 79-111

Keywords: credit ratings; rating agencies; pro-cyclicality; sovereign debt (search for similar items in EconPapers)
JEL-codes: E44 F30 G24 H63 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:y:2013:i:4:p:79-111

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