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Sovereign credit ratings during the COVID-19 pandemic

Using 603 sovereign rating actions by the three leading global rating agencies between January 2020 and March 2021, this paper shows that the severity of sovereign ratings actions is not directly affected by the intensity of the COVID-19 health crisis (proxied by case and mortality rates) but throug...

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Autores principales: Tran, Yen, Vu, Huong, Klusak, Patrycja, Kraemer, Moritz, Hoang, Tri
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Published by Elsevier Inc. 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8590888/
https://www.ncbi.nlm.nih.gov/pubmed/36532659
http://dx.doi.org/10.1016/j.irfa.2021.101879
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author Tran, Yen
Vu, Huong
Klusak, Patrycja
Kraemer, Moritz
Hoang, Tri
author_facet Tran, Yen
Vu, Huong
Klusak, Patrycja
Kraemer, Moritz
Hoang, Tri
author_sort Tran, Yen
collection PubMed
description Using 603 sovereign rating actions by the three leading global rating agencies between January 2020 and March 2021, this paper shows that the severity of sovereign ratings actions is not directly affected by the intensity of the COVID-19 health crisis (proxied by case and mortality rates) but through a mechanism of its negative economic repercussions such as the economic outlook of a country and governments' response to the health crisis. Contrary to expectations, credit rating agencies pursued mostly a business-as-usual approach and reviewed sovereign ratings when they were due for regulatory purposes rather than in response to the rapid developments of the pandemic. Despite their limited reaction to the ongoing pandemic, sovereign rating news from S&P and Moody's still conveyed price-relevant information to the bond markets.
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spelling pubmed-85908882021-11-15 Sovereign credit ratings during the COVID-19 pandemic Tran, Yen Vu, Huong Klusak, Patrycja Kraemer, Moritz Hoang, Tri Int Rev Financ Anal Article Using 603 sovereign rating actions by the three leading global rating agencies between January 2020 and March 2021, this paper shows that the severity of sovereign ratings actions is not directly affected by the intensity of the COVID-19 health crisis (proxied by case and mortality rates) but through a mechanism of its negative economic repercussions such as the economic outlook of a country and governments' response to the health crisis. Contrary to expectations, credit rating agencies pursued mostly a business-as-usual approach and reviewed sovereign ratings when they were due for regulatory purposes rather than in response to the rapid developments of the pandemic. Despite their limited reaction to the ongoing pandemic, sovereign rating news from S&P and Moody's still conveyed price-relevant information to the bond markets. Published by Elsevier Inc. 2021-11 2021-10-12 /pmc/articles/PMC8590888/ /pubmed/36532659 http://dx.doi.org/10.1016/j.irfa.2021.101879 Text en © 2021 Published by Elsevier Inc. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Tran, Yen
Vu, Huong
Klusak, Patrycja
Kraemer, Moritz
Hoang, Tri
Sovereign credit ratings during the COVID-19 pandemic
title Sovereign credit ratings during the COVID-19 pandemic
title_full Sovereign credit ratings during the COVID-19 pandemic
title_fullStr Sovereign credit ratings during the COVID-19 pandemic
title_full_unstemmed Sovereign credit ratings during the COVID-19 pandemic
title_short Sovereign credit ratings during the COVID-19 pandemic
title_sort sovereign credit ratings during the covid-19 pandemic
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8590888/
https://www.ncbi.nlm.nih.gov/pubmed/36532659
http://dx.doi.org/10.1016/j.irfa.2021.101879
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