Bank asset and informational quality

George Kladakis, Lei Chen and Sotirios K. Bellos

Journal of International Financial Markets, Institutions and Money, 2020, vol. 69, issue C

Abstract: We examine the relationship between bank asset and informational quality. We use a diversified panel of 699 banks from 84 countries and measure opacity (lack of informational quality) with rating disagreements between issuer-specific ratings by the Big 3 credit rating agencies (S&P, Moody’s and Fitch). We find that poor asset quality increases the probability of greater credit rating disagreements, and the assignment of a rating by S&P mitigates this effect on the rating disagreement between Moody’s and Fitch. Considering the recent regulatory requirements on the reduction and transparent reporting of non-performing loans, our findings have important policy implications.

Keywords: Banks; Opacity; Split ratings; Asset quality (search for similar items in EconPapers)
JEL-codes: G20 G21 G28 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:69:y:2020:i:c:s1042443120301402

DOI: 10.1016/j.intfin.2020.101256

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