Abstract

http://ssrn.com/abstract=1962840
 
 

Citations (4)



 


 



Does Regulatory Certification Affect the Information Content of Credit Ratings?


Valentina Bruno


American University - Department of Finance and Real Estate

Jess Cornaggia


Georgetown University

Kimberly Rodgers Cornaggia


American University - Kogod School of Business

May 30, 2014


Abstract:     
We exploit an investor-paid rating agency’s designation as a Nationally Recognized Statistical Rating Organization (NRSRO) to test whether this certification affects the agency’s information production. We use a certified issuer-paid agency as a benchmark and find robust evidence that the investor-paid agency’s ratings policy – both timelier and more symmetric with respect to positive and negative information – persists after it became certified for regulatory compliance. Our results suggest that ratings policy is more a function of rating agency compensation structure than the NRSRO certification by the SEC.

Number of Pages in PDF File: 46

Keywords: Credit Ratings, NRSRO, Capital Markets Regulation, Certification

JEL Classification: G21, G28, G38

working papers series


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Date posted: November 22, 2011 ; Last revised: May 31, 2014

Suggested Citation

Bruno, Valentina and Cornaggia, Jess and Cornaggia, Kimberly Rodgers, Does Regulatory Certification Affect the Information Content of Credit Ratings? (May 30, 2014). Available at SSRN: http://ssrn.com/abstract=1962840 or http://dx.doi.org/10.2139/ssrn.1962840

Contact Information

Valentina Giulia Bruno
American University - Department of Finance and Real Estate ( email )
Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States
Jess Cornaggia (Contact Author)
Georgetown University ( email )
3700 O Street, NW
Washington, DC 20057
United States
HOME PAGE: http://www.jesscornaggia.com
Kimberly Rodgers Cornaggia
American University - Kogod School of Business ( email )
4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
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