Impact of the Dodd-Frank Act on Credit Ratings

@article{Dimitrov2014ImpactOT,
  title={Impact of the Dodd-Frank Act on Credit Ratings},
  author={Valentin Dimitrov and Darius Palia and Leo Shing-Tung Tang},
  journal={Comparative Political Economy: Regulation eJournal},
  year={2014}
}
We analyze the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) on corporate bond ratings issued by credit rating agencies (CRAs). We find no evidence that Dodd-Frank disciplines CRAs to provide more accurate and informative credit ratings. Instead, following Dodd-Frank, CRAs issue lower ratings, give more false warnings, and issue downgrades that are less informative. These results are consistent with the reputation model of Morris (2001), and suggest that… Expand
THE IMPACT OF THE DODD-FRANK ACT ON THE INFORMATINAL CONTENT OF CREDIT RATINGS
  • 2017
In 2010, U.S. Congress passed the Dodd-Frank Act (Dodd-Frank) which outlined a series of regulatory reforms to the credit rating industry. We examine the extent to which the withdrawal of anExpand
Does the Dodd-Frank Act reduce the conflict of interests of credit rating agencies?
I compare issuer-paid ratings, represented by Standard & Poor's (SP i.e., firms with a large bond issuance, larger firms, and low-performing firms. Further, I find evidence of a greater accuracy ofExpand
An Empirical Analysis of the effects of the Dodd-Frank Act on the Determinants and Informativeness of Credit Ratings
We study the effects of the Dodd-Frank Act on the determinants and informativeness of credit ratings. We predict that the increase in regulatory oversight and litigation risk, as well as improvedExpand
Detecting conflicts of interest in credit rating changes: a distribution dynamics approach
In this study, we compare the adjustments of credit ratings by an investor-paid credit rating agency (CRA), represented by Egan-Jones Ratings Company, and an issuer-paid CRA, represented by Moody’sExpand
Reputational Shocks and the Information Content of Credit Ratings
We investigate how shocks to the reputation of credit rating agencies and the subsequent introduction of stricter regulation affect investors’ reaction to rating signals. We focus on three majorExpand
The impact of ESMA regulatory identifiers on the quality of ratings
This paper investigates the impact of the introduction of ESMA credit rating identifiers on the quality of ratings. These identifiers form part of the disclosure requirements placed upon creditExpand
Informational role of rating revisions after reputational events and regulation reforms
Abstract This paper analyzes how reputational shocks and regulatory reforms have affected the value-relevant information content of rating adjustments announced by the main Credit Rating AgenciesExpand
Rating-Based Restriction, Credit Rating Inflation and Bond Covenants - Evidence from Chinese Bond Market
This paper highlights the relation of two independent streams of the literature, the literature on bond covenants and literature on credit rating inflation and addresses how bond covenants are usedExpand
The impact of issuer-pay on corporate bond rating properties: Evidence from Moody׳s and S&P׳s initial adoptions☆
This study examines whether and how the properties of corporate bond ratings change following Moody׳s and S&P׳s adoptions of the issuer-pay business model in the early 1970s. Regulators and debtExpand
How has the Passage of the Dodd-Frank Act Affected Performances of Small and Medium Size Banks? An Empirical Analysis of Increasing Regulatory Stringency
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law as a policy response to the worst financial crisis since the Great Depression. WithExpand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 48 REFERENCES
Ratings Reform: The Good, The Bad, and The Ugly
Both in Europe and in the United States, major steps have been taken to render credit rating agencies more accountable. But do these steps address the causes of the debacle in the subprime mortgageExpand
The Issuer-Pays Rating Model and Ratings Inflation: Evidence from Corporate Credit Ratings
This paper provides evidence that the conflict of interest caused by the issuer-pays rating model leads to inflated corporate credit ratings. Comparing the ratings issued by Standard & Poor's RatingsExpand
Rating Agencies in the Face of Regulation
This paper develops a theoretical framework to shed light on variation in credit rating standards over time and across asset classes. Ratings issued by credit rating agencies serve a dual role: theyExpand
The impact of issuer-pay on corporate bond rating properties: Evidence from Moody׳s and S&P׳s initial adoptions☆
This study examines whether and how the properties of corporate bond ratings change following Moody׳s and S&P׳s adoptions of the issuer-pay business model in the early 1970s. Regulators and debtExpand
Informational Effects of Regulation Fd: Evidence from Rating Agencies
This paper studies changes in the information environment brought about by Regulation Fair Disclosure (FD), which was implemented on October 23, 2000. FD now prohibits U.S. public companies fromExpand
The Credit Ratings Game
The collapse of so many AAA-rated structured finance products in 2007-2008 has brought renewed attention to the causes of ratings failures and the conflicts of interest in the Credit RatingsExpand
Credit Ratings and Litigation Risk
We develop a model of a credit rating agency in which the rating agency expends due-diligence effort to learn about the issuer's credit risk, and the precision of its rating is predicated both onExpand
The Credit Rating Crisis and the Informational Content of Corporate Credit Ratings
There has been much scrutiny of the Credit Rating Agencies’ (CRAs) flawed ratings of structured products in the build-up to the financial crisis. Our study examines whether the ‘credit rating crisis’Expand
The Credit Rating Crisis and the Informational Content of Corporate Credit Ratings
There has been much scrutiny of the Credit Rating Agencies’ (CRAs) flawed ratings of structured products in the build-up to the financial crisis. Our study examines whether the ‘credit rating crisis’Expand
A Pattern of Unaccountability: Rating Agency Liability, The Dodd-Frank Act, and a Financial Crisis That Could Have Been Prevented
By opining on the credit quality of structured debt products, credit rating agencies guide investment decisions and facilitate the debt capital markets. In the years leading up to the financialExpand
...
1
2
3
4
5
...