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The game changer: Regulatory reform and multiple credit ratings by Huang, He (author);Svec, Jiri (author);Wu, Eliza (author) is a Economics, Econometrics and Finance article available to read on EtoBox.

What is The game changer: Regulatory reform and multiple credit ratings about?

This paper examines the change in the regulatory use of multiple credit ratings after the Dodd-Frank Act (Dodd-Frank). We find that post Dodd-Frank reform, firms are less likely to demand a third rating (typically from Fitch) for ratings near the high yield (HY) -investment grade (IG) boundary to support their new corporate bond issues. Third ratings also become less informative post Dodd-Frank, with a much weaker market impact on credit spreads for firms with S&P and Moody"s ratings on opposite sides of the HY-IG rating boundary. We provide new evidence on the effect of Dodd-Frank in curbing corporate borrowers" strategic use of multiple credit ratings near this boundary.

Who reads The game changer: Regulatory reform and multiple credit ratings?

Author

Huang, He (author);Svec, Jiri (author);Wu, Eliza (author)

Publisher

Elsevier BV

Published

2021

Language

EN

Field

Economics, Econometrics and Finance (Social Sciences)