Credit Rating and Competition

@article{Camanho2012CreditRA,
  title={Credit Rating and Competition},
  author={Nelson Camanho and Pragyan Deb and Zijun Liu},
  journal={Corporate Finance 6},
  year={2012}
}
In principle, credit rating agencies are supposed to be impartial observers that bridge the gap between private information of issuers and the information available to the wider pool of investors. However, since the 1970s, rating agencies have relied on an issuer-pay model, creating a conflict of interest the largest source of income for the rating agencies are the fees paid by the issuers the rating agencies are supposed to impartially rate. In this paper, we explore the trade-off between… Expand
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