Worse ratings by U.S. rating agencies for European sovereigns no argument for European rating agency
Whom to contact
For Researchers
President
If you have any further questions please contact me.
+49 345 7753-700 Request per E-MailFor Journalists
Head of Public Relations
If you have any further questions please contact me.
+49 345 7753-720 Request per E-MailIWH list of experts
The IWH list of experts provides an overview of IWH research topics and the researchers and scientists in these areas. The relevant experts for the topics listed there can be reached for questions as usual through the IWH Press Office.
Related Publications
European versus Anglo-Saxon Credit View: Evidence from the Eurozone Sovereign Debt Crisis
in: IWH Discussion Papers,
34,
2016
published in: Journal of International Financial Markets, Institutions and Money
Abstract
We analyse whether different levels of country ties to Europe among the rating agencies Moody’s, S&P, and Fitch affect the assignment of sovereign credit ratings, using the Eurozone sovereign debt crisis of 2009-2012 as a natural laboratory. We find that Fitch, the rating agency among the “Big Three” with significantly stronger ties to Europe compared to its two more US-tied peers, assigned on average more favourable ratings to Eurozone issuers during the crisis. However, Fitch’s better ratings for Eurozone issuers seem to be neglected by investors as they rather follow the rating actions of Moody’s and S&P. Our results thus doubt the often proposed need for an independent European credit rating agency.
