Credit Ratings across Asset Classes: A ≡ A?

  title={Credit Ratings across Asset Classes: A ≡ A?},
  author={Jess Cornaggia and Kimberly J. Cornaggia and John Hund},
We test whether credit ratings contain the same information across asset classes. A variety of metrics indicate that relative to traditional corporate bonds, municipal and sovereign bonds receive harsher ratings and structured products receive more generous ratings. These findings have persisted to varying degrees over the past three decades. Consistent with a conflict of interest in an issuer-pays compensation structure, ratings standards are inversely correlated with revenue generation among… CONTINUE READING