Sovereign Debt and Rating Agency Bias

1. Front Matter

   Pages i-x

   PDF

2. Credit Rating Agencies as Gatekeepers

   • David F. Tennant, Marlon R. Tracey

   Pages 1-14

3. Establishing the Determinants of Sovereign Debt Ratings: Is There Really Room for Bias?

   • David F. Tennant, Marlon R. Tracey

   Pages 15-35

4. Resilience in Spite of Controversy: Conditions for Bias in the Credit Rating Industry

   • David F. Tennant, Marlon R. Tracey

   Pages 36-60

5. Trends in Sovereign Debt Ratings: Are There any Preliminary Signs of Bias?

   • David F. Tennant, Marlon R. Tracey

   Pages 61-75

6. Introducing Greater Rigor— Methodological Approach

   • David F. Tennant, Marlon R. Tracey

   Pages 76-86

7. Are Poorer Countries Disadvantaged by the CRAs? Empirically Establishing a Bias

   • David F. Tennant, Marlon R. Tracey

   Pages 87-102

8. Now That We Have Found Bias, What Are We Going to Do with It?

   • David F. Tennant, Marlon R. Tracey

   Pages 103-114

9. Back Matter

   Pages 115-125

   PDF

Sovereign Debt and Credit Rating Bias rejects the notion that credit rating agencies' rigorous and transparent determination of ratings leaves no room for bias, and debunks the myth that the value CRAs place on their reputational capital precludes prolonged biases. To determine the extent of CRAs' biased actions, Tennant and Tracey apply a rigorous methodology to a well-established economic model of the determinants of sovereign debt quality. They present strong evidence of bias against poor countries and demonstrate how biased rating changes could disadvantage such countries and the companies operating therein as they seek access to international capital markets. They discuss plausible explanations for the bias and suggest remedial measures that would help ensure balance in credit rating changes. This book fills an important gap by rigorously examining a long-standing but often ignored concern about the rating practices of credit rating agencies.

• Credit rating agencies
• Sovereign debt
• S&P
• Moody's
• Fitch
• Bias
• Upgrades
• Downgrades
• Developing countries
• Standard & Poor
• Developing Countries
• Rating
• banking

• Development Finance and Associate Dean, University of the West Indies, Mona, Jamaica

  David F. Tennant

• Binghamton University, State University of New York, USA

  Marlon R. Tracey

David F. Tennant is Professor of Development Finance in the Department of Economics and Associate Dean in the Faculty of Social Sciences at the University of the West Indies, Jamaica. He was previously Economist in the Financial Regulations Division of the Jamaican Ministry of Finance and Planning.
 

Marlon R. Tracey is a doctoral student in his final year of studying labor economics and applied econometrics in the Department of Economics at Binghamton University, State University of New York, USA. He was previously Lecturer of Statistics and Statistics Coordinator in the Department of Economics at the University of the West Indies, Jamaica.

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