Is bigger better? The impact of the size of banks on credit ratings
Is bigger better? The impact of the size of banks on credit ratings
Author(s): Patrycja Chodnicka-JaworskaSubject(s): Business Economy / Management, Financial Markets, Accounting - Business Administration, Socio-Economic Research
Published by: Wyższa Szkoła Informatyki i Zarządzania z siedzibą w Rzeszowie
Keywords: credit rating; logit panel data models; banking sector;
Summary/Abstract: The aim of the paper was to analyse the factors influencing European banks’ credit ratings by taking into account the size of these institutions. A literature review on the indicators that can impact bank notes has been made. As a result, the following hypotheses have been drawn: banks’ capital adequacy, profitability, liquidity and management quality have a significant influence on bank credit ratings. Bigger banks receive higher credit ratings than the smaller ones in similar financial conditions. To verify the presented hypotheses ordered log it panel data models have been used. The analysis has been prepared by using the quarterly data from the Thomson Reuters database for the period between 1998 to 2015. The European banks’ long-term issuer credit ratings proposed by S&P, Fitch and Moody are used as dependent variables. The sample has been divided into subsamples according to the size of a bank and banking sector and capitalization.
Journal: Financial Internet Quarterly
- Issue Year: 16/2020
- Issue No: 2
- Page Range: 24-36
- Page Count: 13
- Language: English
