The role of rating agencies in the Eurozone sovereign debt crisis
Type
applied research project
Start Date
01 October 2010
End Date
31 July 2014
Status
ongoing
Keywords
rating agencies
sovereign debt
crisis
multiple equilibria
self-fulfilling prophecy
interest rates
spreads
budget deficit
Description
The project attempts to provide an empirical understanding of the role of rating agencies in sovereign debt crises in general, and in the Eurozone's sovereign debt crisis in particular. It looks both at what determines sovereign bond ratings, and at the effects of rating changes. From a macroeconomic perspective we try to find out whether Europe faced a scenario of multiple equilibria and self-fulfilling prophecy, and how rating agencies affected the dynamics within such a system.
Leader contributor(s)
Member contributor(s)
Funder(s)
Topic(s)
rating agencies
models of sovereign debt crises
Method(s)
theoretical analysis
statistical and narrative empirics
Range
Institute/School
Range (De)
Institut/School
Division(s)
Eprints ID
212380

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Die USA haben den Verlust des AAA-Ratings kaum gespürt : Gespräch mit Philippe Chappuis

2012-08-06 , Gärtner, Manfred

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Griechenland und die 'Meinungen' der Ratingagenturen : (in griechischer Sprache)

2014-08-24 , Gärtner, Manfred

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The near-death experience of the Celtic Tiger : A model-driven narrative from the European sovereign cebt crisis

2013-09-23 , Gärtner, Manfred , Griesbach, Björn , Mennillo, Giulia

We narrate Ireland's recent odyssey from the pride and envy of Europe to kneeling supplicant through the eyes of an econometric model of the government bond market. The exercise suggests that, in essence, two developments triggered and propelled Ireland's drift towards sovereign default: first, the global financial crisis that drove Ireland into a severe recession with collapsing tax revenues and increasing unemployment; second, a gap between the post-2007 increase in sovereign default risk that can actually be linked to macroeconomic fundamentals and the much bigger increase in perceived risk reflected by high interest rates and communicated by the massive downgrades of Ireland's sovereign debt rating. [http://ideas.repec.org/p/usg/econwp/201321.html Volltext herunterladen]

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Umstrittene Ratingagenturen : Interview

2012-01-17 , Gärtner, Manfred

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St. Galler Professor erklärt den Rating-Teufelskreis : Interview mit Raphaela Birrer

2012-07-25 , Gärtner, Manfred

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Sovereign debt ratings before the recent financial crisis and beyond

2013-05-09 , Gärtner, Manfred , Griesbach, Björn

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The Power of the Rating Agencies : Video interview on the nexus between the debt crisis and the financial crisis

2011-08-16 , Gärtner, Manfred

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Publication

Standards are Poor: On Competence and Professional Integrity at the Leading Rating Agency

2014-07-15 , Gärtner, Manfred

Competence behind the rating of sovereign countries is crucial, given that the market for government bonds may be vulnerable to multiple equilibria and self-fulfilling prophecies. With this in mind, this paper reviews and scrutinizes an official Standard and Poor's (S&P) publication that addresses key issues surrounding the market for government bonds and the role of sovereign ratings. It encounters: a low level of competence, revealed in an inability to engage in logical discourse and an inadequate grasp of crucial concepts such as multiple equilibria and self-fulfilling prophecy; obliviousness to S&P's own rating methodology; and a nonchalant treatment of facts that casts a poor light on its professional integrity. [http://ideas.repec.org/p/usg/econwp/201418.html Volltext herunterladen]

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Die Macht der Ratingagenturen : Videointerview zum Zusammenhang zwischen Schulden- und Finanzkrise und die Macht der Ratingagenturen

2011-08-16 , Gärtner, Manfred

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Ratingagenturen: "Völlig andere Muster als früher" : Interview mit Arne Gottschalck

2012-08-10 , Gärtner, Manfred

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