Abstract This paper examines the behaviour of credit rating agencies (CRAs) during the ebbing ‘pink tide’. It claims that the actions of S&P Global, Moody’s and Fitch contributed to dismantling left-wing regimes in Latin America, to the benefit of their right-wing competitors. The methodology draws on case studies of Brazil and Argentina, where the governments of Dilma Rousseff and Cristina Fernández de Kirchner were replaced by those of Michel Temer and Mauricio Macri, respectively. The research is based on sovereign ratings, reports and press releases the agencies issued during those transitions, which are analysed in the light of critical theories of their modus operandi and confronted with the political processes unfolding in both countries. This allows us to draw conclusions that are consistent with the presented argument, thereby contributing to advance the research agenda around the CRAs and to shed light on Brazil and Argentina’s recent critical presidential transitions. (CRAs pink tide. tide . tide’ SP S P Global Moodys Moody s leftwing left wing America rightwing right competitors Argentina Macri respectively ratings transitions countries argument Argentinas

Resumo Este artigo examina o comportamento das agências de classificação de crédito (CRAs) durante a “maré rosa”. O argumento trabalhado é que as ações da S&P Global, Moody’s e Fitch contribuíram para o desmantelamento dos regimes de esquerda na América Latina, em benefício de seus concorrentes de direita. A metodologia baseia-se em estudos de caso do Brasil e da Argentina, onde os governos de Dilma Rousseff e Cristina Fernández de Kirchner foram substituídos pelos de Michel Temer e Mauricio Macri, respectivamente. A pesquisa baseia-se em classificações soberanas, relatórios e comunicados de imprensa emitidos pelas agências durante essas transições, que são analisados à luz de teorias críticas de seu modus operandi e confrontados com o processo político que se desenrola em ambos os países. Isso nos permite tirar conclusões consistentes com o argumento apresentado, contribuindo assim para o avanço da agenda de pesquisa sobre as CRAs e para lançar luz sobre as recentes transições presidenciais críticas do Brasil e da Argentina. (CRAs maré rosa. rosa . rosa” SP S P Global Moodys Moody s Latina direita baseiase baseia Argentina Macri respectivamente soberanas países apresentado

ABSTRACT This paper analyzes the restrictions imposed by financialization on domestic policy space, especially in emerging economies, in light of the actions of credit rating agencies. The working hypothesis is that these agencies, in their interaction with governments, act to constrain the policy space from their position in the international financial system. Thereby, they operate in favor of the financial markets’ agenda through the issuance of sovereign ratings and at the discursive level. The methodology draws on the case study of Brazil, based on sovereign ratings and reports issued by S&P Global, Moody’s, and Fitch Ratings, which shows that such agencies have a vast repertoire to promote the orthodox neoliberal agenda in the national political and economic process. economies governments system Thereby markets level Brazil SP S P Global Moodys, Moodys Moody s, s Moody’s Ratings process

RESUMO O artigo examina as restrições impostas pela financeirização sobre o “policy space” doméstico, em especial de economias emergentes, à luz da atuação das agências de rating. A hipótese de trabalho é que essas agências, em sua interação com governos, atuam para reduzir o “policy space” a partir da posição que ocupam no sistema financeiro internacional. Nesse sentido, tanto através da atribuição de ratings soberanos quanto no plano discursivo, elas operam em prol da implementação de uma agenda de interesse do mercado financeiro. A metodologia do artigo consiste no estudo de caso do Brasil, com base nos ratings e relatórios emitidos por S&P Global, Moody’s e Fitch Ratings sobre o país, que evidenciam que tais agências dispõem de um variado repertório para promover a agenda ortodoxa neoliberal no processo político e econômico nacional. policy space doméstico emergentes rating governos internacional sentido discursivo Brasil SP S P Global Moodys Moody s país nacional

Abstract Purpose: This study examines the effect of the informational content of local credit rating announcements in emerging markets on the liquidity of their bond markets. This study analyses the liquidity of bonds in various emerging bond markets using a sample of nine countries: Argentina, Mexico, Peru, Hungary, Poland, Spain, Turkey, Hong Kong and Greece. The sample includes daily data on sovereign bonds that go from July 2009 to July 2017. The main focus is on the period before and after the sovereign debt crisis. This study notes that the bond liquidity is affected due to the sign of the rating granted by the rating agencies for each country. Design/methodology/approach: This study aims to question the sources of liquidity problem of sovereign bonds issued by the emerging countries. The study’s database consists of daily data of all nine emerging countries for the period from July 2009 to July 2017. Panel data were collected from the Datastream database. Findings: This study first directly tests the information content of bond ratings announcements and their effect on bond market liquidity. Next, the impact of rating changes on sovereign bond liquidity around the rating announcements is studied. Rating changes can affect sovereign bond's price, trading and liquidity around the announcement date. In particular the rating changes that move the bonds out of the investment grade category can elicit selling pressure or even fire sale of the fallen angels. Originality/value: This research aims to present data on the prices of sovereign bonds that react to changes in credit rating by studying the price movements around the announcement of changes in credit rating. The literature is very rich in studies on credit rating changes on stocks and corporate bonds, but this study is perhaps the first attempt on sovereign bonds.

Abstract This paper analyzes credit rating agencies’ actions in Brazilian presidential transitions in the light of what is understood as financialization. It argues that the agencies, from their position in the international financial system, express and promote the financialization process during presidential transitions. To that end, they resort to forms of political activism in favor of the orthodox agenda defended by financial markets enthusiasts. The methodology draws on the case study of Brazil, with reference to the five presidential transitions that took place there between 2002 and 2018. The analysis is based mainly on the Brazilian sovereign ratings issued by S&P Global, Moody’s and Fitch Ratings, and on the country reports published by these agencies.

BACKGROUND: This article considers whether South African banks should utilise the credit ratings provided by US-based credit rating agencies when assessing the creditworthiness of corporate borrowers. AIM: A review is conducted of the relevant literature and specifically the methodologies used by the credit rating agencies for ranking corporates in emerging markets. SETTING: The three largest international credit rating agencies are Fitch Ratings, Moody's Investor Services, and Standard and Poor's. These agencies' credit ratings cover the global spectrum of corporate, sovereign, financial and other public entities and the securities and obligations they issue. The analytical frameworks used to produce these ratings are referred to as credit rating methodologies. METHOD: A review of Moody's ratings for South African corporate entities was undertaken to examine claims of a sovereign ceiling influencing the external ratings obtained by these institutions in emerging markets. RESULTS: Only 14 of the 200 global South African ratings pierced the sovereign ceiling. CONCLUSION: The study concludes that the use of unmodified external ratings by banks to assess a corporate borrower should be discouraged. High-level suggestions are provided on how the methodologies and data used by the external agencies may rather be used to arrive at more suitable internal ratings.

En este artículo estudiamos los efectos en el tipo de cambio debidos a las modificaciones en la composición de cartera del sector financiero colombiano durante 2003-2014. Inicialmente facilitamos un entendimiento teórico del mecanismo de transmisión del canal a través de un modelo de cómo el sector bancario asigna de manera óptima su composición de cartera. Esto nos permite caracterizar las desviaciones con respecto a la paridad descubierta de tasas de interés en materia de activos nacionales y en el extranjero. En la aplicación empírica controlamos por un potencial sesgo de simultaneidad utilizando un novedoso instrumento para las composiciones de cartera: el uso de calificaciones crediticias de deuda soberana y los cambios en las perspectivas de Moody's, Standard and Poor's y Fitch Ratings. Nuestros hallazgos indican que los cambios en las composiciones de cartera solo afectan la prima de riesgo a largo plazo (5 años) en hasta cinco meses antes de que desaparezcan los efectos. Además, encontramos efectos más fuertes y persistentes en las composiciones para casos en los que las calificaciones estadounidenses aumentaron con relación a las calificaciones colombianas

In this paper we study exchange rate effects due to shifts in the portfolio composition of the Colombian financial sector during 2003-2014. We first provide a theoretical understanding of the channel's transmission mechanism by modeling how the banking sector optimally allocates its portfolio composition. This allows us to characterize departures from the uncovered interest rate parity condition (UIP) in terms of foreign and domestic assets. In the empirical application, we control for a potential simultaneity bias by using a novel instrument for portfolio compositions: the use of sovereign credit ratings and outlook changes made by Moody's, Standard and Poor's and Fitch Ratings. Our findings indicate that shifts in portfolio balances affect only the long term (5-year) risk premium in up to five months before the effects subside. Additionally, we find stronger and more persistent portfolio effects in cases in which US ratings increased relative to Colombian ratings

The development of subnational credit-rating methodologies affords benefits for subnationals, the sovereign and its citizens. Trusted credit ratings facilitate access to financial markets and above-average ratings allow for the negotiation of better collateral and guarantee agreements, as well as for funding of, for example, infrastructure projects at superior (lower) interest rates. This paper develops the quantitative section of a credit-rating methodology for South African subnationals. The unique characteristics of South African data, their assembly, and the selection of dependent and independent variables for the linear-regression model chosen, are discussed. The methodology is then applied to the provincial Department of Health using linear regression modelling.