216 5.7 Conclusion Improving the market structure and transparency of information in the sr ee gc uu rl ai tt iozrast ii on nt hme al ar ks te dt ehcaasd ree. cTehi ev eqdu ec sotni os ind reer ma bal ien sa twt ehnetti ho enr firnovme s taoc rasd ae rme iicnsd ae ne dd ci fh iasns nu ee lresd cwo ni t shi dme or rteh ae cs ceu rr iastkesi npf roor pmear tl yi o nw oh ne nt hceo rni ss tkrsu tcht ienyg a hr ei gehxepr o rs iesdk t do eaanl sd. We analyzed 3,239 RMBS tranches that were originated and sold from the first qi nuUa rSt esrt aotfe2s 0o1n7t ht oe tchree dt hi ti rrda tqi nuga sr taenr do fs2i z0e2o0f tRoMs tBuSdtyrtahnes ai mc tpi oanc st .o f c r e d i t o r r i g h t s Wb eet wp re oe vni dUeS t shtraetee ss ttrhi ka it nhgarvees udlitf sf e. rFei rnstt ,l ewvee lfsi nodf tchr ae td ci troerd ipt rroattei cntgi os no. f SCpReAc si f idciaf fl el yr, we find inconsistency between CRAs: Moody’s and DBRS do provide better credit ratings on average for RMBS in states with higher creditor protection (closer tSoe cAo An dA,) .o uHro fwi nedv ienrg, swseh of iwn dt hnaot tshi ge nr ei f iecxai ns tt s rienl caot inosni s tf oe nr cKy BbReAt w, eS e&nP, t haonsde FCiRt cAhs. traditionally operating in the market (Moody’s, S&P, and Fitch) and those who are relatively new (DBRS and KBRA). New CRAs tend to provide more optimistic rc aotl il na tgesr, aoln ias v leorcaagtee, dt h iann at h ec ri endc iut mo rb ef rni et no dn leys ws tha et en. t Ph ee r(hma ap jso, r ai tsy op fe trh eo )u trr asne cc ho en’ds hwyi pt ho thhi eg shi es r, nc er we d Ci t Ro rA sp rt ao kt ee c at idovna na tnadg ea roef ct ho en sl oe wq ueer n- rt il syk beonl dv ierro ni nmaesns ti gt nh iant gc ommo er es optimistic ratings. Finally, we find that issuers appear to be aware of the level ol af r cgreerdRi tMo rB pS rdoet ae lcst iwo nh ewnhtehne c( omnasjtorrui ct yt i no gf tRhMe )BtSr adnecahl es ’ sa sc ot hl l eayt etreanl di s t loo ccaotnesdt ri un cat corpetdi mi t oi zre f rt hi eeni rd lryi sskt -arteet. uTrhni sl eivnedl isc a( itne st et hr ma ts i sosf uter ar sn sma ac yt i obne ss iazgea)c bi oyues xl yp lsoeiet ikni ng gt ht oe differences in creditor protection across US states.
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