Credit Ratings, Private Information, and Bank Monitoring Ability

Leonard Nakamura and Kasper Roszbach ()

No 16-14, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: In this paper, we use credit rating data from two large Swedish banks to elicit evidence on banks' loan monitoring ability. For these banks, our tests reveal that banks' internal credit ratings indeed include valuable private information from monitoring, as theory suggests. Banks' private information increases with the size of loans.

Keywords: Monitoring; Banks; Credit Bureau; Private Information; Public Information; Ratings; Regulation; Supervision; Overconfidence (search for similar items in EconPapers)
JEL-codes: D82 G18 G21 G24 G32 G33 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-06-16
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Credit ratings, private information, and bank monitoring ability (2018)
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