Rating Performance and Bank Business Models: Is There a Change with the 2007-2009 Crisis?

33 Pages Posted: 9 Sep 2014

See all articles by Vincenzo D'Apice

Vincenzo D'Apice

Center for Relationship Banking and Economics

Giovanni Ferri

LUMSA University

Punziana Lacitignola

Università degli Studi di Bari “Aldo Moro” (UNIBA)

Date Written: September 8, 2014

Abstract

We investigate the relationship between a bank’s rating and its business model and hypothesize that relationship changed through the crisis. We use bank ratings by Fitch, Moody’s and S&P’s from 2006 to 2009 and proxy the business model via an index given by a banks’ traditional income share in total income. In a sample of 241 listed banks from 39 countries, controlling for sovereign ratings and other bank characteristics, we find that banks with higher values of the index had: i) similar ratings to other banks until 2007; ii) better rating performance through 2008-2009. The evidence supports our hypothesis.

Keywords: Financial Crises, Financial Markets, Ratings, Banks Business Model

JEL Classification: G1, G15, G21, G24

Suggested Citation

D'Apice, Vincenzo and Ferri, Giovanni and Lacitignola, Punziana, Rating Performance and Bank Business Models: Is There a Change with the 2007-2009 Crisis? (September 8, 2014). Available at SSRN: https://ssrn.com/abstract=2493135 or http://dx.doi.org/10.2139/ssrn.2493135

Vincenzo D'Apice (Contact Author)

Center for Relationship Banking and Economics ( email )

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

Punziana Lacitignola

Università degli Studi di Bari “Aldo Moro” (UNIBA) ( email )

Piazza Umberto I
Bari, 70121
Italy

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