Regulations gave eurozone banks incentives to downplay credit risks, paper argues
Paper uses data from Slovenia to analyse accuracy of banks’ credit ratings
Banking regulations in the eurozone before the creation of the Single Supervisory Mechanism provided incentives for banks to downplay corporate borrowers' credit risks, a working paper published by the Bank of Slovenia argues.
In Discretionary credit rating and bank stability in a financial crisis, Arjana Brezigar-Masten, Igor Masten and Matjaž Volk study the incentives facing commercial banks carrying out discretionary credit risk assessments.
The authors use data relating to the credit ratings
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