We model EU countries? bank ratings using financial variables and allowing for intercept and slope heterogeneity. We … find that country-specific factors (in the form of heterogeneous intercepts) are a crucial determinant of ratings. Whilst … ?new? EU countries typically have lower ratings than ?old? EU countries, after ontrolling for financial variables, all …

Peek and Rosengren (2005) suggested the mechanism of ``unnatural selection,'' where Japanese banks with impaired … to 1999. We rigorously demonstrate that their estimation results imply that Japanese banks allocated lending from viable …