Abstract

SEGUI-ALCARAZ, Antoni  and  NIETO-RODRIGO, Ignacio. Rating Agencies and Public Debt in the Valencian Community. Ens. Econ. [online]. 2020, vol.30, n.56, pp.78-104. ISSN 0121-117X.  https://doi.org/10.15446/ede.v30n56.78953.

The objective of this paper is to analyze the influence that the highest levels of public indebtedness have had on the ratings issued by the rating agencies for the Valencian Community. The accumulation of deficits together with the bursting of the housing bubble ended up negatively affecting public accounting. Likewise, the resources transferred through the financing system did not help to reverse the shortage of income for the Valencian administration. Budgetary restrictions were immediately reflected by rating agencies through a reduction in their ratings, generating difficulties in obtaining new liquidity through the market. However, the rapid action of the State allowed the opening of a credit channel for the communities to comply with their financial obligations. The result of the application of the Econometric Model will reveal that the public debt has had a negative impact on the ratings. To a certain extent, the greater accumulation of indebtedness generated after the financial crisis has caused a decline in the credit quality of the Valencian Community.

JEL: H11; E62; D14; C35.

Keywords : rating agencies; public debt; autonomous community; financing; Generalitat Valenciana, over indebtedness.

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