RT Journal Article
SR Electronic
T1 The Effect of Ratings Announcements, on Firms in Bank-Based Systems
JF The Journal of Fixed Income
FD Institutional Investor Journals
SP 84
OP 95
DO 10.3905/jfi.2015.24.4.084
VO 24
IS 4
A1 Florian Kiesel
A1 Dirk Schiereck
YR 2015
UL https://pm-research.com/content/24/4/84.abstract
AB Rating agencies act as intermediaries for investors in evaluating the creditworthiness of borrowers. The role of ratings agencies is particularly crucial in market-based systems, because, in contrast to long-run bank relationships, outside investors are confronted with greater obstacles to in-depth and reliable evaluations of firm credit risk. The financial intermediation in bank-based systems has implications for the role and the focus of credit rating agencies. This study examines the influence of ratings announcements in Germany, one of the premier bank-based systems. During the study period, from January 2000 through June 2014, we examine 189 Standard & Poor’s and 204 Moody’s ratings announcements. Our results show that ratings announcements are less important in the German market than in market-based systems such as the United States.TOPICS: Information providers/credit ratings, developed