Did going public impair Moody's credit ratings?

• 成果类型: Article
• 署名作者: Kedia, Simi; Rajgopal, Shivaram; Zhou, Xing
• 署名单位: Rutgers University System; Rutgers University New Brunswick; Emory University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.07.005
• 发表日期: 2014
• 页码: 293-315
• 关键词: credit ratings; Initial public offering (IPO); Moody's

摘要

We investigate a prominent allegation in congressional hearings that Moody's loosened its rating standards to chase revenue after it went public in 2000. Consistent with this allegation, Moody's ratings for both corporate bonds and structured finance products are significantly more favorable to issuers, relative to S&P's, after Moody's IPO. Moreover, Moody's ratings are more favorable for clients subject to greater conflict of interest. There is little evidence that Moody's higher ratings, post-IPO, are more informative, measured as expected default frequencies (EDFs) or as the probability of default. Our findings inform the debate on whether financial gatekeepers should be publicly traded. (C) 2014 Elsevier B.V. All rights reserved.