Evidence of non-Markovian behavior in the process of bank rating migrations

Borradores de Economia
Número: 
448
Publicado: 
Clasificación JEL: 
C4, E44, G21, G23, G38
Palabras clave: 
financial institutions, macroeconomic variables, capitalization, supervision

Lo más reciente

Juliana Jaramillo-Echeverri, Adriana Sofía Rodríguez
Gaurav Khanna, Carlos Alberto Medina-Durango, Anant Nyshadham, Daniel Ramos-Menchelli, Jorge Andrés Tamayo-Castaño, Audrey Tiew

This paper estimates transition matrices for the ratings on financial insti-tutions, using an unusually informative data set. We show that the process of rating migration exhibits significant non-Markovian behavior, in the sense that the transition intens