Sovereign credit ratings, emerging market risk and financial market volatility
This article presents event studies that find a significant effect on dollar bond yield spreads when rating agencies put emerging-market sovereign bonds on review with negative outlook. The finding has two conditional implications. If rating agencies can be turned from late into early warning signal...
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| Veröffentlicht in: | Inter economics 1998-03, Vol.33 (2), p.73-82 |
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| container_end_page | 82 |
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| container_title | Inter economics |
| container_volume | 33 |
| creator | Reisen, Helmut von Maltzan, Julia |
| description | This article presents event studies that find a significant effect on dollar bond yield spreads when rating agencies put emerging-market sovereign bonds on review with negative outlook. The finding has two conditional implications. If rating agencies can be turned from late into early warning signals, they would have the potential to dampen boom-bust cycles in emerging-market flows. If rating agencies cannot improve on their reactive approach witnessed in the run-up and aftermath of recent currency crises, regulation and guidelines stipulating a certain rating status for institutional investment will continue to intensify boom-bust cycles. The paper concludes with regulatory suggestions for both outcomes. |
| doi_str_mv | 10.1007/BF02929503 |
| format | Article |
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The finding has two conditional implications. If rating agencies can be turned from late into early warning signals, they would have the potential to dampen boom-bust cycles in emerging-market flows. If rating agencies cannot improve on their reactive approach witnessed in the run-up and aftermath of recent currency crises, regulation and guidelines stipulating a certain rating status for institutional investment will continue to intensify boom-bust cycles. The paper concludes with regulatory suggestions for both outcomes.</description><subject>Ankündigungseffekt</subject><subject>Aufstrebende Märkte</subject><subject>Bond ratings</subject><subject>Bonds</subject><subject>Central banks</subject><subject>Credit ratings</subject><subject>Default</subject><subject>Emerging markets</subject><subject>Government bonds</subject><subject>Institutional investments</subject><subject>International finance</subject><subject>Internationaler Finanzmarkt</subject><subject>Investors</subject><subject>Länderrisiko</subject><subject>Market economies</subject><subject>Money</subject><subject>Political risk</subject><subject>Rating services</subject><subject>Ratings & rankings</subject><subject>Regulation of financial institutions</subject><subject>Schätzung</subject><subject>Securities markets</subject><subject>Sovereign debt</subject><subject>Stock exchanges</subject><subject>Volatility</subject><subject>Volatilität</subject><subject>Welt</subject><subject>Yield curve</subject><issn>0020-5346</issn><issn>1613-964X</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>1998</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><sourceid>7TQ</sourceid><sourceid>BENPR</sourceid><recordid>eNp1kM1PGzEQxa0KpAbaS889rOCGSBl71l9HiApUQnBoK_VmObuzqSHZDfYSKf99B4WPUw9vZqT5-Y38hPgi4ZsEsGcXl6C88hrwg5hII3HqTf1nT0wAFEw11uajOCjlHkAqtH4ibn8OG8qUFn3VZGrTWOU4pn5RTitaUV7wWK1ifiBepPJQxb6tutTHvklx-brZDEt-tEzj9pPY7-Ky0OeXfih-X37_Nbue3txd_Zid30wb9Aa5xvlcdU2UHpQzbWOUwgjG2NYSGh0pgneqs7pFNBSdp9brjkB39VyTw0NxvPNd5-HxicoY7oen3PPJoKyzUHuLiqmj_1JSaqcVeoZOdlCTh1IydWGdE39sGySE51DDe6gMX-_gTGtq3sjCQz9yjmETMCJy2bKk945bYinWmmUxOBX-jiu2-rqzomboUwnPrYxDDjUo6fAfXl6LGQ</recordid><startdate>199803</startdate><enddate>199803</enddate><creator>Reisen, Helmut</creator><creator>von Maltzan, Julia</creator><general>Springer</general><general>Springer Nature B.V</general><scope>OT2</scope><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>0-V</scope><scope>0U~</scope><scope>1-H</scope><scope>3V.</scope><scope>7TQ</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>87Z</scope><scope>88F</scope><scope>8AO</scope><scope>8FK</scope><scope>8FL</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ALSLI</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DHY</scope><scope>DON</scope><scope>DPSOV</scope><scope>DWQXO</scope><scope>FRNLG</scope><scope>F~G</scope><scope>K60</scope><scope>K6~</scope><scope>KC-</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M1Q</scope><scope>M2L</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope><scope>S0X</scope></search><sort><creationdate>199803</creationdate><title>Sovereign credit ratings, emerging market risk and financial market volatility</title><author>Reisen, Helmut ; 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| fulltext | fulltext |
| identifier | ISSN: 0020-5346 |
| ispartof | Inter economics, 1998-03, Vol.33 (2), p.73-82 |
| issn | 0020-5346 1613-964X |
| language | eng |
| recordid | cdi_proquest_journals_2787049732 |
| source | RePEc; PAIS Index; EZB Electronic Journals Library; SpringerLink Journals - AutoHoldings |
| subjects | Ankündigungseffekt Aufstrebende Märkte Bond ratings Bonds Central banks Credit ratings Default Emerging markets Government bonds Institutional investments International finance Internationaler Finanzmarkt Investors Länderrisiko Market economies Money Political risk Rating services Ratings & rankings Regulation of financial institutions Schätzung Securities markets Sovereign debt Stock exchanges Volatility Volatilität Welt Yield curve |
| title | Sovereign credit ratings, emerging market risk and financial market volatility |
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