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Market-Based Solutions to Vital Economic Issues

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Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
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Market-Based Solutions to Vital Economic Issues

private credit

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This year’s in-person convening will discuss unique challenges and opportunities related to ESG issues in alternative investments.

This study uses passage of the Dodd-Frank Act as a setting to examine whether changes in legal liability exposure faced by credit rating agencies affect the number of financial statement information signals required before rating changes. For upgrades, we predict and find that the greater legal exposure after the Act incentivized rating agencies to require more information signals, i.e., a greater number of prior quarters in which upgrades were implied by financial statement information.