Credit Ratings Quality in Uncertain Times

71 Pages Posted: 16 Nov 2020 Last revised: 7 Mar 2023

See all articles by Najah Attig

Najah Attig

Dalhousie University

Hamdi Driss

Saint Mary's University

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Date Written: September 27, 2020


We investigate ratings quality across uncertain and normal times proxied by variations in economic policy uncertainty. We find that increased policy uncertainty is associated with weaker rating standards. This finding is unrelated to variations in macroeconomic conditions and holds when we use an instrumental variable approach. The effect is more pronounced for firms with which rating agencies have more conflicts of interest. We also find that ratings are less informative about firm credit quality in times of heightened policy uncertainty. These findings suggest that increased policy uncertainty distorts ratings quality through a conflicts of interest channel.

Keywords: ratings quality; conflicts of interest; policy uncertainty; regulation

JEL Classification: G18, G24, G28, D83, L15

Suggested Citation

Attig, Najah and Driss, Hamdi and El Ghoul, Sadok, Credit Ratings Quality in Uncertain Times (September 27, 2020). Journal of International Financial Markets, Institutions and Money, Available at SSRN: or

Najah Attig

Dalhousie University ( email )

Rowe School of Business
6100 University Avenue
Halifax, Nova Scotia B3H 4R2
902-494-7486 (Phone)


Hamdi Driss

Saint Mary's University ( email )

923 Robie St.
Saint Mary's University - FISMS
Halifax, Nova Scotia B3H 3C3


Sadok El Ghoul (Contact Author)

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
780-465-8725 (Phone)
780-465-8760 (Fax)

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