ECB paper claims credit rating agencies traded grades for custom

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Credit rating agencies assigned more positive ratings to institutions more likely to provide further business, according to a working paper published by the European Central Bank (ECB) on October 18, which covered an assessment period from 1990–2011.

The authors, Harald Hau, Sam Langfield and David Marques-Ibanez, presented evidence that banks that regularly used the same rating agency to assess their asset-backed securities were rewarded with a better credit rating. "We consider that this

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