Internal Loan Ratings, Supervision, and Procyclical Leverage

Using administrative data from the Shared National Credit (SNC) Program, we find evidence of systematic downward drift in ratings, consistent with initial ratings inflation. The drift is predictable based on pre-issuance borrower characteristics, suggesting that screening and pricing information is not being fully incorporated into ratings.

• Use cases, geography and tags
• Organizations that created, adopted or are mentioned
• Ecosystem position
• Link to the original asset
• Comments and reactions