Discussion On Quality Control Of Credit Ratings In Structured Finance

As the deterioration progress of subprime crisis has been transferred from financial system to the real economy, recently the causes of subprime crisis have attracted lots of financial experts' attention, and this article mainly focuses on the credit rating agencies' responsibilities for subprime crisis. Firstly, this article introduced structured finance technologies and products, the consequences of over-creation in finance fields and the reasons of subprime crisis. Then, it discusses the developments of credit rating industry with regards to structured finance, the positive roles of credit rating in structured finance and negative effects on subprime crisis. And the main part of this article is about the credit rating of quality control in structured finance, which is demonstrated in three aspects - industry self-regulation of credit rating agencies, governments monitoring and international organizations supervision. Finally, according to China's structured finance market and the credit rating industry conditions, it brings about appropriate quality control proposals of China's structured finance ratings in light of the experience of the international monitoring operation and lessons from subprime crisis.