Leads and lags in sovereign credit ratings

B-Tier
Journal: Journal of Banking & Finance
Year: 2010
Volume: 34
Issue: 11
Pages: 2614-2626

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper analyses lead-lag relationships in sovereign ratings across five agencies, and finds evidence of interdependence in rating actions. Upgrade (downgrade) probabilities are much higher, and downgrade (upgrade) probabilities are much lower for a sovereign issuer with a recent upgrade (downgrade) by another agency. S&P tends to demonstrate the least dependence on other agencies, and Moody's tends to be the first mover in upgrades. Rating actions by Japanese agencies tend to lag those of the larger agencies, although there is some evidence that they lead Moody's downgrades.

Technical Details

RePEc Handle
repec:eee:jbfina:v:34:y:2010:i:11:p:2614-2626
Journal Field
Finance
Author Count
2
Added to Database
2026-01-24