Aftermath of the Subprime Crisis: Reputational Damages Suffered by Major and Minor Rating Agencies
International Review of Business Research Papers
Vol. 11. No. 2. , September 2015, Pages: 77 – 89Aftermath of the Subprime Crisis: Reputational Damages Suffered by Major and Minor Rating Agencies
The paper explores the reputational damages suffered by major and minor rating agencies as a consequence of the subprime crisis. The analysis is carried out through a standard event standard methodology on a sample of 1821 rating actions during the period November 2003 - November 2013. The evidence shows a lower market reaction to rating actions, especially when the evaluation is far away from the threshold between investment and speculative grade.JEL Codes: G12, G14, G24