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Author: Yang Liu
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper examines how firm credit ratings affect the use of outstanding private debt and unused lines of credit. Firms not having credit ratings have more outstanding private debt and unused lines of credit than firms having credit ratings. Firms of low credit ratings also use more private debt than firms of high credit ratings. Firms rated speculative grades increase unused credit lines more than firms rated investment grades when their credit ratings deteriorate. Moreover, firms with high credit ratings have more unused lines of credit relative to outstanding private debt than firms with low credit ratings. Firms also use more private debt when they are near credit rating upgrades or downgrades between investment grades and speculative grades.
Author: Yang Liu
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper examines how firm credit ratings affect the use of outstanding private debt and unused lines of credit. Firms not having credit ratings have more outstanding private debt and unused lines of credit than firms having credit ratings. Firms of low credit ratings also use more private debt than firms of high credit ratings. Firms rated speculative grades increase unused credit lines more than firms rated investment grades when their credit ratings deteriorate. Moreover, firms with high credit ratings have more unused lines of credit relative to outstanding private debt than firms with low credit ratings. Firms also use more private debt when they are near credit rating upgrades or downgrades between investment grades and speculative grades.
Author: Tong Jiao
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Metodij Hadzi-Vaskov
Publisher: International Monetary Fund
ISBN: 1513509012
Category : Business & Economics
Languages : en
Pages : 37
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Book Description
This study investigates the nonlinear relationship between public debt and sovereign credit ratings, using a wide sample of over one hundred advanced, emerging, and developing economies. It finds that: i) higher public debt lowers the probability of being placed in a higher rating category; ii) the negative debt-ratings relationship is nonlinear and depends on the rating grade itself; and iii) the identified nonlinearity explains the differential impact of debt on ratings in advanced economies versus in emerging markets and developing economies. These results hold for both gross debt and net debt, and are robust to alternative dependent variable definitions, analytical techniques, and empirical specifications. These findings underscore the potential for fiscal consolidation in helping countries achieve a better credit rating.
Author: Eugen Tereanu
Publisher: International Monetary Fund
ISBN: 1455210900
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
We identify global and regional fluctuations in international private debt flows to emerging and developing countries using data on cross border loans and international bond issuance over 1993 -2009. We estimate the effects of individual borrower characteristics as well as macroeconomic conditions on the cost of foreign borrowing and test whether these effects differ across phases of the lending cycle. We find that public and financial institutions benefit from lower spreads compared to private and nonfinancial firms and that lenders may differentiate the risk associated with the borrower’s industrial sector between good and bad times. The loan (bond) rating has an equally robust spread reduction effect across credit cycle phases. The results also suggest that international reserve holdings and investment ratios have a significant effect on reducing credit spreads for loans, while higher reserve holdings and longer maturities matter more for bond spreads.
Author: Michael Klausner
Publisher: Irwin Professional Publishing
ISBN:
Category : Business & Economics
Languages : en
Pages : 380
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Book Description
The thrift crisis and recent weakness in the banking sector has intensified attention toward regulatory reform. But most proposals take as a given the traditional structure of banking, under which a bank holds illiquid loans and liquid liabilities. Structural Change in Banking explores the possibility of more fundamental changes in bank structure, which would reduce the instability that is inherent in the current structure. The major essays in this book, written by leading authors in the field, examine the historical legacy of limitations on bank branching and their consequences on bank structure and stability; how securitization affects the bank structure, risk, and liquidity; the advantages to a bank from having checking account information about its loan customers; and the potential for money market funds and finance companies to become the banks of the future. Structural Change in Banking is an essential tool for bank regulators, legislators, executives, and anyone concerned with rectifying the instability of traditional banking structure. This book not only makes a strong argument for change, it provides an intelligent analysis of alternatives through which credit can be provided.
Author: B. Paudyn
Publisher: Springer
ISBN: 1137302771
Category : Political Science
Languages : en
Pages : 257
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Book Description
Bartholomew Paudyn investigates how governments across the globe struggle to constitute the authoritative knowledge underpinning the political economy of creditworthiness and what the (neoliberal) 'fiscal normality' means for democratic governance.
Author: Sabrina Schleimer
Publisher: GRIN Verlag
ISBN: 3668779430
Category : Business & Economics
Languages : en
Pages : 16
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Book Description
Seminar paper from the year 2018 in the subject Business economics - Investment and Finance, grade: 1,7, University of Strathclyde (Business School), course: International Financial Markets and Banking, language: English, abstract: This assignment will examine whether credit rating agencies can be regarded as useful. In order to do so, two given academic papers will be analysed and discussed, supplemented by further academic literature. The first of the two is a working paper by Efraim Benmelech called “Credit Ratings: Qualitative Versus Quantitative Information”. The second one is called “What’s Wrong with Credit Ratings” and written by Frank Partnoy. Before looking at these papers in greater detail, it is important to provide a general definition of CRAs. Gavras defines CRAs as “private companies [which] assess credit risk for companies and governments seeking to take out loans and issue fixed-income securities”. Arnold states that this risk assessment comes in the form of a rating, which represents the CRAs’ opinion of the rated entity’s creditworthiness, i.e. its “ability to repay its debt”. Both Gavras and Arnold remark that the rating ultimately affects the price and interest rate paid by the borrower on the debt instrument. Having generally defined CRAs, the authors of the two given papers also provide their own views. Both Benmelech and Partnoy agree with Gavras regarding the importance of CRAs in today’s credit markets and the strong influence these agencies have. They also agree that CRAs played a major part in the 2007/08 financial crisis. In his paper, Benmelech evaluates rating by S&P Global Ratings Inc. and concludes that they are vastly quantitative and, thus, can easily be predicted and substituted “by an algorithm that uses just ten financial variables”. On a similar note, Partnoy believes that rating methodologies are highly uninformative, that numerous reforms after the financial crisis have failed, and that the unchanged overreliance of investors and regulators on these ratings should be reduced.
Author: Francesco De Pascalis
Publisher: BRILL
ISBN: 9004341854
Category : Business & Economics
Languages : en
Pages : 245
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Book Description
Taking position from the recent 2007-2009 financial crisis, Credit Ratings and Market Over-reliance: An International Legal Analysis by Francesco De Pascalis provides an in depth legal and regulatory analysis of the concept of over-reliance in the use of ratings and how regulation facilitates over-reliance is different from mere reliance on credit ratings. Not only does the book provide an incisive doctrinal analysis of the concept of over-reliance, it also considers over-reliance from a comparative and international perspective by reviewing legal and regulatory developments under European Union and US law and how over-reliance has been addressed in international financial regulation.
Author: Giulia Mennillo
Publisher:
ISBN: 9781788211925
Category :
Languages : en
Pages : 240
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Book Description
This short book introduces and explores the complex world of the credit rating industry: how it works, how it has evolved, the role it played in the financial crisis, and how it is regulated. Giulia Mennillo shows, as constitutive actors of global financial capitalism, CRAs have a social and political relevance that reaches well beyond finance.
Author: Ramin Baghai
Publisher:
ISBN:
Category : Credit ratings
Languages : en
Pages : 0
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Book Description
