The European Credit Rating Industry
: The Impact of Regulations

  • Soud A R S M Almutairi

    Student thesis: Doctoral Thesis


    The flaws in the credit rating systems and the bankruptcy of large financial corporations exacerbated the 2008 global financial crisis and caused significant damage to European economies. These developments displayed the necessity of improved credit rating systems and regulations to prevent the repetition of similar financial crises. In this context, this thesis examines the impact of recent E.U. governing changes in the rating business on credit rating agency behaviour, the quality of non-financial enterprise credit ratings, and E.U. members' enforcement of the laws.
    Our main findings indicated that no significant change in the behaviour of CRAs after the regulatory arrangements, no evidence that the new rules negatively affected the accuracy of the corporate credit ratings and led to more false warnings, and the enforcement levels of new regulations and the enforcement determinants differ across country groups.
    The thesis identifies flaws in the E.U.'s current regulatory changes and provides a more comprehensive picture of the regulations' effects and consequences on the credit rating sector. In addition, the thesis highlights the enforcement aspect of the rules and dimensions behind the variation in the enforcement levels across countries. To the best of our knowledge, this thesis is the first one examined the impact of the E.U. regulations on the CRAs by using a panel data set of all non-financial firms in the E.U.
    Date of Award10 Feb 2023
    Original languageEnglish
    SupervisorAndrew Wood (Supervisor) & Giota Papadimitri (Supervisor)

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