An Analysis of Bank Financial Strength Ratings and Credit Rating Data
In this study, data from two credit rating agencies are analyzed to consider how different Bank Financial Strength Ratings and Credit Ratings from two rating agencies compare. To my knowledge, prior research has not analyzed Bank Financial Strength Ratings from different rating agencies, nor has it...
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-08-01
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| Series: | Risks |
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| Online Access: | https://www.mdpi.com/2227-9091/9/9/155 |
| _version_ | 1797517288218296320 |
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| author | John A. Ruddy |
| author_facet | John A. Ruddy |
| author_sort | John A. Ruddy |
| collection | DOAJ |
| description | In this study, data from two credit rating agencies are analyzed to consider how different Bank Financial Strength Ratings and Credit Ratings from two rating agencies compare. To my knowledge, prior research has not analyzed Bank Financial Strength Ratings from different rating agencies, nor has it compared Bank Financial Strength Ratings to general credit ratings. These facts make this research unique. Univariate analyses are utilized to show relationships in the ratings data, along with parametric and non-parametric tests to make statistical inferences about the ratings data. There are five findings. First, ratings from different rating agencies are highly correlated. Second, different types of ratings from the same rating agency are highly correlated. Third, bank financial strength ratings are more conservative than credit ratings. Fourth, bank financial strength ratings declined in rating more quickly at the start of the financial crisis. Fifth, bank financial strength ratings from the Kroll Bond Rating Agency were more conservative than ratings from Moody’s Investors Service. The research findings and results are important for investors who consider ratings agency data to determine the risk of banking institutions. The results are also important to businesses that rely on bank credit rating data and policy makers who regulate banking institutions. |
| first_indexed | 2024-03-10T07:14:37Z |
| format | Article |
| id | doaj.art-945eda8ef0d14537b25ea7830387c29b |
| institution | Directory Open Access Journal |
| issn | 2227-9091 |
| language | English |
| last_indexed | 2024-03-10T07:14:37Z |
| publishDate | 2021-08-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Risks |
| spelling | doaj.art-945eda8ef0d14537b25ea7830387c29b2023-11-22T15:08:48ZengMDPI AGRisks2227-90912021-08-019915510.3390/risks9090155An Analysis of Bank Financial Strength Ratings and Credit Rating DataJohn A. Ruddy0Economics and Finance Department, Kania School of Management, University of Scranton, Scranton, PA 18510, USAIn this study, data from two credit rating agencies are analyzed to consider how different Bank Financial Strength Ratings and Credit Ratings from two rating agencies compare. To my knowledge, prior research has not analyzed Bank Financial Strength Ratings from different rating agencies, nor has it compared Bank Financial Strength Ratings to general credit ratings. These facts make this research unique. Univariate analyses are utilized to show relationships in the ratings data, along with parametric and non-parametric tests to make statistical inferences about the ratings data. There are five findings. First, ratings from different rating agencies are highly correlated. Second, different types of ratings from the same rating agency are highly correlated. Third, bank financial strength ratings are more conservative than credit ratings. Fourth, bank financial strength ratings declined in rating more quickly at the start of the financial crisis. Fifth, bank financial strength ratings from the Kroll Bond Rating Agency were more conservative than ratings from Moody’s Investors Service. The research findings and results are important for investors who consider ratings agency data to determine the risk of banking institutions. The results are also important to businesses that rely on bank credit rating data and policy makers who regulate banking institutions.https://www.mdpi.com/2227-9091/9/9/155bankingcredit ratingsrating agenciesbank financial strength ratings |
| spellingShingle | John A. Ruddy An Analysis of Bank Financial Strength Ratings and Credit Rating Data Risks banking credit ratings rating agencies bank financial strength ratings |
| title | An Analysis of Bank Financial Strength Ratings and Credit Rating Data |
| title_full | An Analysis of Bank Financial Strength Ratings and Credit Rating Data |
| title_fullStr | An Analysis of Bank Financial Strength Ratings and Credit Rating Data |
| title_full_unstemmed | An Analysis of Bank Financial Strength Ratings and Credit Rating Data |
| title_short | An Analysis of Bank Financial Strength Ratings and Credit Rating Data |
| title_sort | analysis of bank financial strength ratings and credit rating data |
| topic | banking credit ratings rating agencies bank financial strength ratings |
| url | https://www.mdpi.com/2227-9091/9/9/155 |
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