As a direct consequence of the new Basel 2 Accord for banking and Solvency 2 for insurance, the financial services industry is searching for the development of new quantitative approaches in order to evaluate operational credit risks more effectively. Starting from these premises, this paper...

We show that rating agencies have become more conservative in assigning credit ratings to corporations over the period 1985 to 2009. Holding firm characteristics constant, average ratings have dropped by three notches (e.g., from A to BBB ) over time. Consistent with the view that this change...

This study examines empirically whether corporate ratings by the credit rating agency Standard & Poor's reflect fundamental and publicly observable shocks to the credit quality of companies. This serves to assess the degree of information sensitivity of external ratings, and the timeliness of...