175 We now shift our attention to each of the small CRAs (DBRS and KBRA) separately in Panel B of Table 4.8 to assess whether this effect is the same for both DBRS and K1 -B2R) Aa.nWd et rsat nu cdhyetsh reattreadn bc hy eKs Bt hRaAt aa nr ed raa tl ea dr gbeyr Dp eBeRrS( ac no ldu amlna sr g3e-r4 p) .eRe er m( caorl kuambnl ys, b1 o- 2t h) . oWuhr i lies sfuoerr KsBi zReAmweea soubrseesr vaer ehni gohtlyh isgihglnyi f isci ag nn ti f irceasnutl tfso rf oDr B R S ( c o l u m n s Issuer Size by Balance; we find that large issuers (in terms of balance size) increase the odds ol efveexl p( ze-rsi teantc=i n2g. 6a9b) ,ect toel ru mr ant i (n4g) .bTy hKeBcRo Ae f fbi cyi e6n3t%o ,f wt hhei coht hi es rs ii sgsnui feirc as ni zteamt tehaes u1r%e , Issuer Size by Frequency, is also positive, with odds of 0.77, and highly significant at the 1% level, column (3). To summarize, we find that small CRAs are more likely to provide a better rating than large CRAs, on average, when the tranche is issued by a more powerful iosfspureor.v Ei dsipnegc bi ael tl yt e frocrr Ke dBiRt Ar a, twi neg ss .eIet mt haayt iws seul lebr es ’ tphoa wt Ke Br Ri nAc rperaosvei sd et hbee tl itkeer l ci hr eodo idt rr ae vt ienngus ewahnedn, de ve ea nl i tnugawl l yi t, ha mh iog rhee pr omwaerrkf eutl si shsaureer. sT, ht oi si nmc re ea ansse t thhaet cwh ea nc caen osfuf pu pt uorret HfryopmotshmeaslilsC3RiAnsw, choimchpawreedpotositthtehiar tlalargrgeer piseseuresr. s tend to receive better ratings 4.6 Conclusion The impact of competition in the structured finance market on rating quality has rReecgeui vl aetdo rssu hb as vt aenat ti tael ma tpt teendt itoons tbi ym au cl aa tdee nmeiwc s eannt rda nr et sg ui nl at tootrhs ei nC Rt hA ei nl adsuts tdreyc. aTdhee. qt huee sqtui oa nl i t ryeomf ar iant si nwg sh. eWt heear ntahl ey sz ee r4u, 1l e9s0 aRnMd Br Se gt ur al antci oh ne ss thhaavtewae pr eo soirt ii gv ien ea ft feedc ta no nd sold from the first quarter of 2017 and the third quarter of 2020 to study the impact of competition on rating quality. Chapter 4 - Intensified Competition and the Impact on Credit Ratings
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