Size and Support Ratings of US Banks
31 Pages Posted: 12 Aug 2014
Date Written: August 11, 2014
Abstract
We examine whether Fitch support ratings of US banks depend on bank size. Using quarterly data for the period 2004:Q4 to 2012:Q4 and controlling for several factors that make large and small banks different, we find that bank size is positively related to support ratings. However, the effect is non-linear in line with the 'too-big-to-rescue' argument. After the failure of Lehman Brothers and the passing of Dodd-Frank the relation between size and potential support has become stronger.
Keywords: support ratings, bank size, too-big-too-fail, financial crises
JEL Classification: G21, G32, L25
Suggested Citation: Suggested Citation
Poghosyan, Tigran and Werger, Charlotte and de Haan, Jakob, Size and Support Ratings of US Banks (August 11, 2014). De Nederlandsche Bank Working Paper No. 434, Available at SSRN: https://ssrn.com/abstract=2479199 or http://dx.doi.org/10.2139/ssrn.2479199
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