Bank asset and informational quality

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

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.

Citation

Kladakis, G., Chen, L., & Bellos, S. K. (2020). Bank asset and informational quality. Journal of International Financial Markets, Institutions and Money, 69, Article 101256. https://doi.org/10.1016/j.intfin.2020.101256

• 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