We examine the relationship between multiple credit rating purchases by banks and liquidity creation using a diverse sample of 486 banks from 71 countries. We show that liquidity creation is negatively associated with the number of ratings purchased by the bank, and that capital can positively moderate this relationship, allowing banks that obtain more ratings to create more liquidity.
Kladakis, G., Chen, L., & Bellos, S. K. (2022). Multiple credit ratings and liquidity creation. Finance Research Letters, 46(A), Article 102313. https://doi.org/10.1016/j.frl.2021.102313