Rating and Bank-Firm Relationship

Michele Modina
Additional contact information
Michele Modina: Università degli Studi del Molise

Chapter 7 in Credit Rating and Bank-Firm Relationships, 2015, pp 127-140 from Palgrave Macmillan

Abstract: Abstract An internal rating system is made of “the articulated whole of organizational methods and processes which allow to reach the classification on an ordinal scale as to the creditworthiness of a subject and which, therefore make the distribution of all credit borrowers in different risk classes, to which different probabilities of insolvencies correspond” (De Laurentis, 2001). In other words, credit rating is an instrument able to estimate the probability of insolvency of a company, expressed in terms of probability on a specific temporal horizon. These models are not based on abstract hypotheses but are generated by databases which accumulated years of measurements regarding default events which occurred in different economic, technological and operational conditions. The introduction of said system has had significant importance as it occurred in a context in which the transitions of risk were evaluated with a track character (acceptance/nonacceptance).

Keywords: Credit Risk; Credit Rating; Bank Credit; Financial Exchange; Relational Capital (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-49622-5_8

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137496225

DOI: 10.1057/9781137496225_8

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().