Uncovering the repercussions of the US's credit rating downgrade on global equity markets

Wajahat Azmi, Shujaat Naeem Azmi, Haitham Nobanee and Philip Anthony Hamill

Finance Research Letters, 2023, vol. 58, issue PD

Abstract: This paper examines the effect of Fitch's announcement of the US's credit downgrade on the global equity markets. The results show no significant evidence of Fitch's announcement leading to collapse and trigger in the global equity markets. These results are similar even when we classify the markets into different regions. Moreover, with very few exceptions, even the country-level results are consistent with the aggregate and the regional results. We attribute these findings to adjustments already made by the equity investors to Fitch's negative watch on the US ratings and the recent debacles (Silicon Valley Bank, Silvergate, and First Republic Bank).

Keywords: Credit ratings; Event study; Equity markets (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pd:s1544612323010383

DOI: 10.1016/j.frl.2023.104666

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