An analysis of the determinants of bank ratings: Comparison across ratings agencies

Bissoondoyal-Bheenick, E and Treepongkaruna, S 2011, 'An analysis of the determinants of bank ratings: Comparison across ratings agencies', Australian Journal of Management, vol. 36, no. 3, pp. 405-424.


Document type: Journal Article
Collection: Journal Articles

Title An analysis of the determinants of bank ratings: Comparison across ratings agencies
Author(s) Bissoondoyal-Bheenick, E
Treepongkaruna, S
Year 2011
Journal name Australian Journal of Management
Volume number 36
Issue number 3
Start page 405
End page 424
Total pages 20
Publisher Sage Publications
Abstract The recent Global Financial Crisis has focused our attention on the integrity of rating agencies. Often condemned for being too slow to act, rating agencies have been blamed during many financial crises. This impression opens some research questions addressed in this paper. What are the determinants of banks ratings? How do they differ across ratings agencies? This paper analyses the quantitative determinants of bank ratings, provided by Standard & Poor's, Moody's, and Fitch in the United Kingdom and Australia. The main finding is that quantitative factors that reflect asset quality, liquidity risk, capital adequacy and operating performance are the key determinants of bank ratings across the rating agencies. However, macroeconomic variables and market risk factors do not seem to be contributing factors in explaining bank ratings in either country.
Subject Finance
Keyword(s) bank ratings
ordered response model
DOI - identifier 10.1177/0312896211426676
Copyright notice © The Author(s) 2011.
ISSN 0312-8962
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