Published : 2017-08-30

Banks ownership and credit ratings

Patrycja Chodnicka-Jaworska



Abstract

The aim of the paper is the analysis of determinants of long-term credit ratings of European commercial banks according to ownership criteria. On the basis of the literature review the following hypothesis has been expressed: taking into account the financial condition the public banks receive higher credit ratings than private institutions. The ordinary logit panel data models have been used for the study. Examination of the impact of ownership on the bank’s credit rating showed that the put hypothesis cannot be uniquely verified. Public banks receive higher ratings than private institutions taking into account financial conditions, only for S & P notices. Whereas Fitch and Moody lowered their ratings to banks whose investor was the Treasury. This could have been the result of a recapitalization of financial institutions by the state to protect them against the risk of bankruptcy, however such an interpretation requires in-depth research.

Keywords:

credit rating, commercial banks, public banks


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Chodnicka-Jaworska, P. . (2017). Banks ownership and credit ratings. Safe Bank, 67(2), 52–74. Retrieved from https://ojs.bfg.pl/index.php/bb/article/view/254

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