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Why Rating Agencies Disagree on Sovereign Ratings

Author

Listed:
  • Bernd Bartels

    (Department of Economics, Johannes Gutenberg-Universitaet Mainz, Germany)

Abstract
We empirically analyze why rating agencies disagree on countries' default risk. Specifically, we explore the sovereign ratings of four agencies and their interaction. Our results indicate that the frequency of split ratings and their lopsidedness is not related to their home region. We nevertheless nd that rating agencies treat world regions differently. The Big Three rating agencies tend to follow each other predominantly in times of crises. The smaller European agency seems to b e more independent but also more volatile in its rating behaviour.

Suggested Citation

  • Bernd Bartels, 2014. "Why Rating Agencies Disagree on Sovereign Ratings," Working Papers 1416, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 02 Dec 2014.
    • Handle: RePEc:jgu:wpaper:1416
    as

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    File URL: https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1416.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sovereign Risk; European Rating Agency; Rating Agencies;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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