Main factors affecting Banks’ credit ratings

Abstract

Credit ratings of commercial banks are not only the importance problem of banking managers in order to improve their banks’credit worthtiness and performance but also signals for government to make timely intervention to stabilize national banking system. In this paper, we use ordered logit regression model to capture the factors affecting the credit ratings of commercial banks in the emerging markets. The results of the research show that credit rating of country, banking industry country crisk assessment (BICRA), government support or group support and some financial ratios of bank have strong affects on credit rating of commercial banks. The findings of this paper also imply some ways to improve banks’ credit