Multiple ratings and credit standards
Subtitle: differences of opinion in the credit rating industry
By: Richard Cantor, Frank Packer.
Contributors: Packer, Frank.; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 12; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 12.
Publisher: Federal Reserve Bank of New York
Published: 1996
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Credit ratings -- United States -- Evaluation.; Credit ratings -- Evaluation.
Description: "Rating-dependent financial regulators assume that the same letter ratings from different agencies imply the same levels of default risk.  Most 'third' agencies, however, assign significantly higher ratings on average than Moody's and Standard & Poor's.  We show that, contrary to the claims of some rating industry professionals, sample selection bias can account for at most half of the observed average difference in ratings.  We also investigate the economic rationale for using multiple rating agencies.  Among the many variables considered, only size and bond-issuance history are consistently related to the probability of an issuer seeking third ratings.  The probability ties to improve their standing under rating-dependent regulations"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/28/2005.
Also available in print.
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Mode of access: World Wide Web.