TY - JOUR
T1 - An analysis of the determinants of bank ratings: Comparison across ratings agencies
AU - Bissoondoyal-Bheenick, Emawtee
AU - Treepongkaruna, Sirimon
PY - 2011
Y1 - 2011
N2 - The recent Global Financial Crisis has focused our attention on the integrity of rating agencies. Often condemned for being too slow to act, rating agencies have been blamed during many financial crises. This impression opens some research questions addressed in this paper. What are the determinants of banks ratings? How do they differ across ratings agencies? This paper analyses the quantitative determinants of bank ratings, provided by Standard Poor s, Moody s, and Fitch in the United Kingdom and Australia. The main finding is that quantitative factors that reflect asset quality, liquidity risk, capital adequacy and operating performance are the key determinants of bank ratings across the rating agencies. However, macroeconomic variables and market risk factors do not seem to be contributing factors in explaining bank ratings in either country.
AB - The recent Global Financial Crisis has focused our attention on the integrity of rating agencies. Often condemned for being too slow to act, rating agencies have been blamed during many financial crises. This impression opens some research questions addressed in this paper. What are the determinants of banks ratings? How do they differ across ratings agencies? This paper analyses the quantitative determinants of bank ratings, provided by Standard Poor s, Moody s, and Fitch in the United Kingdom and Australia. The main finding is that quantitative factors that reflect asset quality, liquidity risk, capital adequacy and operating performance are the key determinants of bank ratings across the rating agencies. However, macroeconomic variables and market risk factors do not seem to be contributing factors in explaining bank ratings in either country.
U2 - 10.1177/0312896211426676
DO - 10.1177/0312896211426676
M3 - Article
SN - 0312-8962
VL - 36
SP - 405
EP - 424
JO - Australian Journal of Management
JF - Australian Journal of Management
IS - 3
ER -