Rating Performance and Bank Business Models: Is There a Change with the 2007–2009 Crisis?

Vincenzo D’Apice (), Giovanni Ferri and Punziana Lacitignola ()
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Vincenzo D’Apice: CERBE, Abi
Punziana Lacitignola: University of Bari
Authors registered in the RePEc Author Service: Vincenzo D'Apice

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2016, vol. 2, issue 3, No 5, 385-420

Abstract: Abstract We investigate the relationship between a bank’s rating and its business model and hypothesize that relationship changed through the crisis. We use bank ratings by Fitch, Moody’s and S&P’s from 2006 to 2009 and proxy the business model via an index given by a banks’ traditional income share in total income. In a sample of 241 listed banks from 39 countries, controlling for sovereign ratings and other bank characteristics, we find that banks with higher values of the index had: (1) similar ratings to other banks until 2007; (2) better rating performance through 2008–2009. The evidence supports our hypothesis.

Keywords: Financial crises; Financial markets; Bank ratings; Ratings; Banks business models (search for similar items in EconPapers)
JEL-codes: G1 G15 G21 G24 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s40797-016-0036-9

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