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Bank asset and informational quality

Kladakis, George; Chen, Lei; Bellos, Sotirios K.

Authors

George Kladakis

Lei Chen

Sotirios K. Bellos



Abstract

We examine the relationship between bank asset and informational quality. We use a diversified panel of 699 banks from 84 countries and measure opacity (lack of informational quality) with rating disagreements between issuer-specific ratings by the Big 3 credit rating agencies (S&P, Moody’s and Fitch). We find that poor asset quality increases the probability of greater credit rating disagreements, and the assignment of a rating by S&P mitigates this effect on the rating disagreement between Moody’s and Fitch. Considering the recent regulatory requirements on the reduction and transparent reporting of non-performing loans, our findings have important policy implications.

Journal Article Type Article
Acceptance Date Aug 30, 2020
Online Publication Date Sep 23, 2020
Publication Date 2020-11
Deposit Date Nov 2, 2021
Journal Journal of International Financial Markets, Institutions and Money
Print ISSN 1042-4431
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 69
Article Number 101256
DOI https://doi.org/10.1016/j.intfin.2020.101256
Keywords Banks, Opacity, Split ratings, Asset quality
Public URL http://researchrepository.napier.ac.uk/Output/2817699


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