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The Impact of Sovereign Debt Ratings and Financial Performance on Bank Ratings

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Book cover A New Growth Model for the Greek Economy

Abstract

The chapter explores the relation among sovereign debt ratings, individual bank ratings and bank financial status. Credit Rating Agencies (CRA) are crucial to the function of financial markets. Two main blocks of models have been designed to investigate the above relations. The first block uses a constructed binary variable for Fitch’s ranking of European banks. The second block tries to identify the relation between financial performance and ratings. The data used for the empirical analysis, covering the period from 2004 to 2011, focus on the commercial banks of the 27 European Union countries. The statistical results show the close relation among sovereign debt, bank ratings and performance. The statistical importance of this relation is an indicator that external—exogenous factors (CRA) can play a significant role in formulating the economic environment, especially in times of crisis.

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Notes

  1. 1.

    Bankscope does not provide historical ownership data. The only data given are for the last year of entry and can only be used to classify the sample or make panels.

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Author information

Authors and Affiliations

  1. Economics Department, Democritus University of Thrace, Panepistimioupoli, 69100, Komotini, Greece

    Evaggelos Drimpetas

  2. Business Administration Department, TEI of Western Macedonia, Myrsina, 51100, Grevena, Greece

    Themistokles Lazarides

Authors
  1. Evaggelos Drimpetas
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  2. Themistokles Lazarides
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Editor information

Editors and Affiliations

  1. National a. Kapodistrian Univ. Athe, Athens, Greece

    Panagiotis E. Petrakis

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Drimpetas, E., Lazarides, T. (2016). The Impact of Sovereign Debt Ratings and Financial Performance on Bank Ratings. In: Petrakis, P. (eds) A New Growth Model for the Greek Economy. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-58944-6_19

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  • DOI: https://doi.org/10.1057/978-1-137-58944-6_19

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  • Publisher Name: Palgrave Macmillan, New York

  • Print ISBN: 978-1-137-58943-9

  • Online ISBN: 978-1-137-58944-6

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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