By providing an independent evaluation of the probability of default, Credit Rating Agencies (CRAs) play an important role in the functioning of credit markets for a wide range of stakeholder groups. However, the recent turmoil in the international financial markets following the subprime crisis in the US has once again raised questions about the ability of CRAs to meet market needs. This thesis elicits and compares the views of key market participants concerning issues of ratings quality. Specifically, this thesis reports the results of interviewbased research with key market participants, and constructs a measurement instrument to capture ratings quality provided by CRAs. A questionnaire survey is administered to four stakeholder groups in public debt markets: issuers; non-issuing financial managers; institutional investors; and other interested parties. The theoretical model is developed using the extant quality literature which has informed analysis of other gatekeepers such as auditors. The ratings quality model is then extended to a full structural equation model to identify how those ratings quality factors identified in the measurement model affect the issuers' commitment to their CRAs and ultimately their intention to continue the business relationships with their CRAs. This research is the first systematic empirical study of debt market participants' perceptions of CRAs and provides a first step in defining ratings quality and identifying its different characteristics. This study is also the first of its kind to be conducted in a non-US setting and thus provides valuable insights at a time when European regulators are showing an increased interest in the concept of ratings quality.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:494772 |
| Date | January 2008 |
| Creators | Einig, Sandra Elisabeth |
| Publisher | University of the West of Scotland |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
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