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Credit rating agencies have been criticized for their role in the financial crisis by understating credit risk. The US subprime mortgage crisis highlighted the

Rating agencies judge how solvent banks and big companies are. Prior to the financial crisis they were too optimistic when rating the risk of the banks and this

Rating agencies judge how solvent banks and big companies are. Prior to the financial crisis they were too optimistic when rating the risk of the banks and this

In much of the literature, rating agencies are seen as institutions providing informational services to the market. Our paper contributes to this literature by