Multiple credit ratings and liquidity creation

George Kladakis; Lei Chen; Sotirios K. Bellos

doi:10.1016/j.frl.2021.102313

Multiple credit ratings and liquidity creation

George Kladakis^*, Lei Chen, Sotirios K. Bellos

^*Corresponding author for this work

Finance (Business School)

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Article number	102313
Number of pages	7
Journal	Finance Research Letters
Volume	46
Issue number	A
Early online date	9 Apr 2022
DOIs	https://doi.org/10.1016/j.frl.2021.102313
Publication status	Published - 1 May 2022

Keywords

Banks
Rating agencies
Multiple credit ratings
Liquidity creation

Access to Document

10.1016/j.frl.2021.102313

Kladakis_2022_FinReLett_Multiple-credit-ratings-liquidity-creation_AAM
Copyright © 2022 Publisher / the Author(s). This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final version is available at https://doi.org/10.1016/j.frl.2021.102313
Accepted author manuscript, 462 KB

Cite this

@article{ac3b85786d4a485ebacc682fb6f4c225,

title = "Multiple credit ratings and liquidity creation",

abstract = "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.",

keywords = "Banks, Rating agencies, Multiple credit ratings, Liquidity creation",

author = "George Kladakis and Lei Chen and Bellos, {Sotirios K.}",

year = "2022",

month = may,

day = "1",

doi = "10.1016/j.frl.2021.102313",

language = "English",

volume = "46",

journal = "Finance Research Letters",

issn = "1544-6123",

publisher = "Elsevier",

number = "A",

}

TY - JOUR

T1 - Multiple credit ratings and liquidity creation

AU - Kladakis, George

AU - Chen, Lei

AU - Bellos, Sotirios K.

PY - 2022/5/1

Y1 - 2022/5/1

N2 - 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.

AB - 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.

KW - Banks

KW - Rating agencies

KW - Multiple credit ratings

KW - Liquidity creation

U2 - 10.1016/j.frl.2021.102313

DO - 10.1016/j.frl.2021.102313

M3 - Article

SN - 1544-6123

VL - 46

JO - Finance Research Letters

JF - Finance Research Letters

IS - A

M1 - 102313

ER -

Multiple credit ratings and liquidity creation

Abstract

Keywords

Access to Document

Fingerprint

Cite this