How did increased competition affect credit ratings?
By: Bo Becker, Todd Milbourn
Contributors: Milbourn, Todd T.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16404; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16404.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "The credit rating industry has historically been dominated by just two agencies, Moody's and S&P, leading to longstanding legislative and regulatory calls for increased competition.  The material entry of a third rating agency (Fitch) to the competitive landscape offers a unique experiment to empirically examine how in fact increased competition affects the credit ratings market.  Increased competition from Fitch coincides with lower quality ratings from the incumbents: rating levels went up, the correlation between ratings and market-implied yields fell, and the ability of ratings to predict default deteriorated.  We offer several possible explanations for these findings that are linked to existing theories"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/16/2010.

Includes bibliographical references.

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Mode of access: World Wide Web.