Research Of Civil Responsibility Of Credit Rating Agency

During the past century, Credit Rating System was operated by the developedcountries in Europe and America, becoming one of the most important System being setup in the capital and credit market. Credit Rating Agencies were recognized by variousparties in the capital market with their impersonality, justness, independency andprofessionalism, their position in the global capital market emerging year by year.However, Credit Rating Agencies were widely criticized by their unsatisfied performanceduring the global financial crisis caused by American secondary debt crisis. Legalresponsibility of Credit Rating Agency is dominated by Administration responsibility andCriminal responsibility other than Civil responsibility, which is legislation vacancy intheory. From the author’s viewpoint, it is necessary to provide civilly protection andrelief for main body under average by rating results, which results considering of civilresponsibility of Credit Rating Agency(CRA).Section1will discuss CRA’s professional perspective as foundation of the research.What is CRA? What is CRA’s philosophy and essence? Firstly, discuss basic category ofCRA and introduce CRA’s history, classification, implication, structure and qualification.Secondly, analyze CRA’s process and mechanism from the prospect of informationcollection, scientific basis, rating results’ social and economic value, and self disciplineand market regulation. At last, conclude with CRA’s professional essence, i.e. CreditRating is perspective of future credit risk, inspection of the Rated, ranking for credit riskpossibilities and it is a dynamic procedure.Section2will discuss the property of setting up civil responsibility for CRA. Firstly,though as profitable private main body, CRA gradually acquired public credibility duringlong term development. However, their public credibility might be influenced or evencontrolled by various beneficial factors, including restricted effectiveness caused bymonopolized CRAs, publisher being payer caused inflated rate, benefit conflict causedoppugned credibility, late adjustment of CRA and prompt down grade, incomplete ratingmethod and non-transparent process, and ect. Damage credibility results in requirementfor legal average, and creating civil responsibility for CRA is necessary and feasible.Section3will discuss nature of CRA’s civil responsibility. Firstly, analyze andconsider the legal positioning of CRA in the history, different legal positioning, differentnature of responsibility. Secondly, analyze legal relationship during rating process, in order to identify nature of responsibility. In the field of civil law, responsibility of tortand breach are major characters in the field of civil law, which requires further researchand compare for clarification. In a rating contract, the equality and closure is missing,freedom of contract is affected, and to conclude it as tort responsibility is in advantage.Section4will analyze identify legal responsibility of CRA. Base on tortresponsibility being confirmed, it deserves consideration on how to identifyresponsibility. The application of liability of fixation is the foundation, which alsoreflects the benefit balance of damaged party and trespasser. To identify responsibilitymust identify fault. The author will support the statement of fault judgment from bothobjective and subjective prospect, i.e. to judge the fault from subjective prospective ofprofessional standard. How to identify damage and casualty are other import factors toidentify responsibility.Section5will discuss taken civil responsibility. How to execute responsibility andto allocate responsibility under the circumstances that responsibility had been identified?Firstly, the damager party is third party, and main body is CRA. Secondly, indemnity sthe major responsibility, what is the guideline and coverage of the damage? Thirdly, theresponsibility is limited; the civil responsibility of CRA should be distributed in thesociety.Section6is design of policy of baring civil responsibility by CRA, which requiresnecessary policy quarentee. The author will raise policy construction and suggestions interms of various policy of deposit of CRA (deposit of responsibility), operational risk ofCRA being transferred via commercial insurance, tort responsibility of CRA is theburdon of proof in reverse, and class action of damage party.