JEL classification: C23, G21, G24;
Keywords: credit rating, logit panel data models, banking sector;
Abstract: The aim of the paper was to analyse the factors influencing European banks’ credit ratings by taking
into account the size of these institutions. A literature review onthe indicators that can impact
bank notes has been made. As a result, the following hypotheses have beendrawn:banks’ capital
adequacy, profitability, liquidity and management quality have a significant influence on bank
credit ratings. Bigger banks receive higher credit ratings than the smaller ones in similar financial
conditions. To verify the presented hypotheses ordered logit panel data models have been used.
The analysis has been prepared by using the quarterly data from the Thomson Reuters database for
the period between 1998 to 2015. The European banks’ long-term issuer credit ratings proposed
by S&P, Fitch and Moody are used as dependent variables. The sample has been divided into
subsamples according to the size of a bank and banking sector and capitalization.