Why Do Supervisors Rate Banking Organizations?

James Bergin and Kevin Stiroh ()
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James Bergin: https://www.newyorkfed.org/aboutthefed/orgchart/bergin.html

Economic Policy Review, 2021, vol. 27, issue 3, 27

Abstract: This article addresses a question that at first may appear simple: why do supervisors rate banking organizations? Prudential supervisors have a long-standing practice of confidentially rating the condition of the firms that they supervise. These ratings are used for a variety of purposes and can have important consequences. The authors analyze the history and evolution of this practice and consider how the use of ratings advances the statutory and regulatory goals of supervision of banking organizations. They conclude with a discussion of the implications for the design and implementation of bank ratings systems.

Keywords: bank ratings; banks; financial institutions; bank supervision; bank regulation; financial regulations; risk assessment (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2021
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