Essays in Bank Credit Ratings

Abstract

Corporate governance has been blamed at different occasions in the past two decades as a key factor of financial turmoil. The most recent global financial crisis of 2007-8 has reopened the discussion of the importance of corporate governance that had gained much attention in the past on the aftermath of the 2001-2 high profile corporate collapses. Using a commonly accepted framework for evaluating bank ratings, we find evidence that governance attributes explain bank credit ratings. We come to this conclusion initially by using principal components drawn from PCA analysis of a large group of governance variables and then by a selection the governance variables. Similar evidence is presented using a set of country institutional components. Lastly, we find no evidence that the relationship between governance and bank credit ratings for any of the three principal CRAs changes in the periods before and after the global financial crisis, i.e. for the periods until 2008 and from 2009.

Date of Award	20 Jan 2021
Original language	English
Awarding Institution	University of Bath
Supervisor	Andreas Krause (Supervisor)