73 finance securities, such as CLO tranches, that have complexity characteristics in ti nh eSi re cstei oc un r i3t .y3 ,d feoslilgonw. eTdh eb ys atmh rpel ee cs oe cntsi tornusc ttihoant adneds cmr iebteh ooduor l oegmy pai rr ei c adle sr ce rs iubl et sd. The empirical findings as to whether complexity of the CLO tranche is related toor dt ehre tnougma bi ne ra of uf rr taht ei nr gus nddi es cr sl ot as en dd i antg i os sf ut ahne c reo al er eo fd ec os cmr ipbl ee dx i ti yn iSne ct thi eo nn u3m. 4 b. eI nr od fe ar al i tni ng gws i, tihn CSReAc tsi oi nn d3i s. 5a gwr ee erme pe on rt t, i o. eu. , rwehme pn i trhi cearle ri es saudl tiss carse pt oa nwc hy ei nt hreart iins gs us e( ri ns such a circumstance the ratings are often called ‘split’), are more likely to disclose bwoet hs hroawt i nt ghsa tf ocro mC LpOl es xti ht ya tmaar tet emr so ri ne ct ho emdpel ec ixs itohna no ff oi srs luees rss ctoomr pe pl eoxr tC oL nOes . oWr thwi l oe ci nr ve edsi tt orrast ianrges aowna trhe eoi rf tChLeOcsr,eidni tSreacttiinogn r3i s. 6k wc aeu saends wb ye rr at ht ien gq uc ae tset iroi nngoaf nwd hreatthi negr shopping behavior. Finally, in Section 3.7 we conclude. 3.2 Literature on the credit rating process 3.2.1 Rating Processes Globally, Moody’s, S&P and Fitch are the three largest CRAs, together representing circa 93% of the market in Europe and 96% of the market in the US (European Securities and Markets Authorities (ESMA), 2018; Securities and Exchange Cs mo ma lml e irsCs iRoAns (aSrEeCr)e, c2o0g1n8i z) e. dB ebsyi dr ee gs ut lhaet soer y“ Ba ui gt hTohrri et iee”s gt ol oabsasl easgs ecnr ce ideist ,waodrdt iht ii no ensasl op fr oi vs issui eo sn oo nr ri isssku ea rs ss .e sTshme e inmt spoa fc st t rouf crt eugr ue dl a pt i roond uocnt s t ihsea qc uu ra rl iet ny t ot of pi incf oo rf md eabt iaot ne (see, e.g., De Haan & Amtenbrink, 2011). It has been widely argued that the risk assessment processes applied by CRAs played a part in creating the circumstances that led to the global financial crisis Chapter 3 - Security Design and Credit Rating Risk
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