Does Europe Need Its Own Rating Agencies?

SERIES Working Paper No. 33

Posted: 31 May 2011

Abstract

Monetary unions generally boost financial markets. But European private capital markets have progressed at an unsatisfactory pace even with the euro. What accounts for this? We focus on an increasingly key financial infrastructure: Rating Agencies (RAs). Taking an international perspective, we show that: (i) financial market development increases with the presence of national RAs; (ii) in four studied Asian countries, smaller-sized companies disproportionately hold a rating from national RAs, while disregarding the global RAs (Moody’s, S&P, Fitch). We argue that the absence of European RAs may currently limit the extent of rated companies and financial market evolution in Euroland.

Keywords: National vs. global credit rating agencies, financial market development

JEL Classification: G2, G3

Suggested Citation

Ferri, Giovanni and Lacitignola, Punziana, Does Europe Need Its Own Rating Agencies?. SERIES Working Paper No. 33. Available at SSRN: https://ssrn.com/abstract=1855855

Giovanni Ferri (Contact Author)

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

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

Punziana Lacitignola

University of Bari ( email )

Piazza Umberto I
Bari, 70121
Italy

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