Uncovering the repercussions of the US's credit rating downgrade on global equity markets

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dc.contributor.authorAzmi ,Wajahat
dc.contributor.authorNaeem Azmi, Shujaat
dc.contributor.authorNobanee,Haitham
dc.contributor.authorHamill,Philip Anthony
dc.date.accessioned2024-04-17T12:53:08Z
dc.date.available2024-04-17T12:53:08Z
dc.date.issued2023-11-10
dc.descriptionOver the years, we have witnessed a consistent rise in the significance placed on credit rating agencies (Fitch, Moody's, S&P) when it comes to providing crucial information to investors for informed decisions. A rating of AAA is akin to the gold standard in the financial community for investments in either a company or sovereign instruments. A sovereign credit rating is a mechanism for ascertaining the possibility of default by a country in meeting its payment obligations promptly for its external debt. Revisions in credit ratings are significant events for a country, as they have implications for the economic growth of the reevaluated nation through changes in capital flows and interest rates (Chen et al., 2016).
dc.description.abstractThis paper examines the effect of Fitch's announcement of the US's credit downgrade on the global equity markets. The results show no significant evidence of Fitch's announcement leading to collapse and trigger in the global equity markets. These results are similar even when we classify the markets into different regions. Moreover, with very few exceptions, even the country-level results are consistent with the aggregate and the regional results. We attribute these findings to adjustments already made by the equity investors to Fitch's negative watch on the US ratings and the recent debacles (Silicon Valley Bank, Silvergate, and First Republic Bank). keywords: Global equity, Markets, Equity investors, First Republic Bank
dc.identifier.citationAzmi, W., Azmi, S. N., Nobanee, H., & Hamill, P. A. (2023). Uncovering the repercussions of the US's credit rating downgrade on global equity markets. Finance Research Letters, 58, 104666.
dc.identifier.doihttps://doi.org/10.1016/j.frl.2023.104666
dc.identifier.urihttps://dspace.adu.ac.ae/handle/1/4795
dc.language.isoen
dc.publisherElsevier
dc.titleUncovering the repercussions of the US's credit rating downgrade on global equity markets
dc.typeArticle

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