Are the Ratings Good Indicators of the Creditworthiness of the Entities that Qualify?

Carlos Muñoz, José Manuel Pastor and Juan Francisco Fernández Guevara

Chapter 6 in Bank Strategy, Governance and Ratings, 2011, pp 109-133 from Palgrave Macmillan

Abstract: Abstract A rating is an indicator, normally drawn up by a specialized agency, which measures the solvency of an entity or issue of assets by means of a categorical scale. The ultimate purpose of ratings is to inform other market agents (investors and regulators) regarding the solvency of the entities evaluated and/or of the assets issued. The rating reduces one of the main problems of markets: the asymmetry of information between issuers and other agents, since the latter do not have access to all the information relating to the solvency of the entity that is being rated (Losada, 2009).

Keywords: Rating Agency; Total Asset; Credit Rating; Fourth Quarter; Saving Bank (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1057/9780230313866_7

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