128 St heec of enwd , mt haer kReMt sBtSa rmg ea tr ekde thies a, bv ei l cy abuys er eogfui ltas tri oo nl e wi nh tehree sr ue gbuplrai tmo resms oour tgghat gt eo ci mr i spi rs o, ov ne et hoef market structure by stimulating competition and transparency in the rating process.36 To the best of our knowledge, our study is the first to analyze the intensified competition in a market heavily targeted by regulation, where smaller CRAs have gained significant prominence after the 2007 subprime mortgage crisis. Sc ou mr ppr ei st ii nt igolny , i ng ti vheenr atthi na gt mt haer koebt jf eocr t Ri vMe sB So af nrda ttion igmrpergouvl ea tt ihoen r awt ienr ge s tpor oi cme ps sr o, nv oe sr et ul adtieeds thoatvhee i cnovne tsrt ii bg auttei odnt ho if sRiMs sBuSe .r Ta thi ne rges ht oa vt he ebseuebnpsrtiumdei ems oornt gvaagr ei ocur si siisssauneds ti nh et hseu br as teiqnug emn ta rGkl eotbsa. lHFoiwn aenv ce ira, lp Cr er vi si oi su (s GsFt uC d) , i eass twh ae tl l haasv eo tahnearl ydzeevde ltohpe me ne nt rt ys of new CRAs to the market focused mainly on bond rating developments both prior to and right after the GFC (e.g., Bae et al., 2019; Becker and Milbourn, 2f o0c1u1s ) o, fb ut ht en roat t oi nng ssetcuudryi ,t itzheed apnraol dy suicst sp. rMi moar reiol yv ecro, mw ph ae rne dc otmh ep ectoi tmi opne twi tai os nt hoef the largest two CRAs (Moody’s and S&P), to that of the third largest CRA (Fitch) iMn i tl hb eo ur ar nt i,n2g0m1 1a;rBk ae et feotrabl .o, 2n0d1s 5( s) .eOe nel. yg .a, Jfeewwesltl uadnide sL (i vFilny gn snt oa nn d, 2G0h0e0n; tB, 2e 0c k1e7r; aBna de er at tai nl . ,g2m0 1a9r k) ehta, vbeustc raug taiinni zneodt t fhoer eRnMt r By So fs spiegcni iffi iccaal nl yt. sBma as el lde roCnR tAhse ti or tehme pcirrei cdai tl evidence, the results of competition were mixed. Becker and Milbourn (2011), froa rt i enxga imn fpl al et ,i of inn db ye cMo no oo md yi ’csa lal ny dmSo&d Pe sitnb ruet ssptoant isset i ct oa l ltyh es i ge nn itfriyc aonft Feivt icdhe nt oc et hoef 36E th U D e a B E n R U d S M U h S B a S s c r g m e r d a o i r w t k r n e a t t t , i o n D b g B e m R t S a h ’ r e m k f e a o t r u a k r s e t h t o f s l h a 2 r a 0 g r 2 e e 0 s i . t s H i r n o o t w u er g e n h v a e ly t r i , 1o D n 4 B a % R l S C a ’ R s m A o a , f r b 2 k u 0 e t 2 t s 0 s t h . i l I a l n r h e t a h i s n e o t U n h S l e y M M a B B sS m S m m al a a l r r p k k o e e r t t t , i i D o s n B re R ( m r S o a iu s r g k ah a ls l b y o l y 3 t h h % e ig ) f h oo e f u r tr . h t In h e li an rtghees tE CURaAn dw0i t. h7 %a 2i n0 2t h0 emUaSr kr ae tt i snhg amr ea or kf e3t2a%s .oKf B2 0R2A0i.sKsBl i Rg hAt il ys tshme asl el evre nt ht ah nl aDr Bg eRsSt wC Ri tAh ian ttoht ea lEmU aMr kBeSt ms haarrkee ot fw0i .t3h%a m( EaSrMk eAt, s2h0a2r 0e ; oSf E0C. 3, %2 0, w2 0h)i .l eE KS MB RAAoins l tyh reespeoc rotns dml aarrgkeest t sChRa Ar ei ni nt fhoer mU Sa tMi oBnS amt at hr kee mt wa ri tkhe at l2e0v2e 0l (ms tar rukcet tu sr he da r fei noaf n5c2e%) ; ti nh et hS eE CU rSe Mp oBr St s mmaorrkee dt er teapi ol erdt ei dn f bo yr mS aEtCi oenx ac et et hd e1p0r0o%d u bc te-ct ay up seel emv eolr, eb ur at toi nn gl ys f po er rMpBrSo di nu cgte nmeirgahl .t Tbhee ams sai rgkneetds. hTahr ee calculations by the SEC in 2020 are based on the first six months only.
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