Sovereign Debt and Rating Agency Bias

Sovereign Debt and Rating Agency Bias
Author :
Publisher : Springer
Total Pages : 136
Release :
ISBN-10 : 9781137391506
ISBN-13 : 1137391502
Rating : 4/5 (06 Downloads)

Book Synopsis Sovereign Debt and Rating Agency Bias by : D. Tennant

Download or read book Sovereign Debt and Rating Agency Bias written by D. Tennant and published by Springer. This book was released on 2017-08-15 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sovereign Debt and Credit Rating Bias rejects the notion that credit rating agencies' rigorous and transparent determination of ratings leaves no room for bias, and debunks the myth that the value CRAs place on their reputational capital precludes prolonged biases. To determine the extent of CRAs' biased actions, Tennant and Tracey apply a rigorous methodology to a well-established economic model of the determinants of sovereign debt quality. They present strong evidence of bias against poor countries and demonstrate how biased rating changes could disadvantage such countries and the companies operating therein as they seek access to international capital markets. They discuss plausible explanations for the bias and suggest remedial measures that would help ensure balance in credit rating changes. This book fills an important gap by rigorously examining a long-standing but often ignored concern about the rating practices of credit rating agencies.


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