Doubly Bound: The Cost of Harsh Municipal Credit Ratings

Source: Marc Joffe, University of California – Berkeley, Haas Institute for a Fair and Inclusive Society, 2017

From the press release:
The Haas Institute for a Fair and Inclusive Society released a new research report on the implications of unnecessarily harsh credit ratings for municipal bonds. Entitled “Doubly Bound: The Cost of Harsh Municipal Credit Ratings,” the report argues that municipalities are assigned credit ratings that are more stringent than other asset classes’ assigned credit ratings. The report also uses an alternative model to measure credit ratings that demonstrates a more accurate measure of risk given past performance. This model is used to measure the additional costs to municipalities of the lower credit ratings assigned by credit rating agencies. ….
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