Based On Prevention Of Financial Crisis The Research Of Legal Regulation Credit Rating Agencies

Credit rating agencies as an important participation of the capital market, by providing information services based on credit rating activities for investors to make investment decisions, reduces the information asymmetry and thus balances the information access of both investors and the financing party, reduces the investment risk and help to improve the transaction efficiency. This, will have a great significance for the parties to the investment as well as to the capital markets.On this other hand, the wild development of credit rating agencies have highlighted the problems of monopoly and conflict of interest, which, coupled with the failure of both market and government regulation, eventually led to financial crisis that swept the world and imposed a serious impact on the global economy. In this process, credit rating agencies lost its functions:they failed to reveal the risks when the crisis is looming and were amplifying the same when crisis has become a fact. This has pushed the credit rating agencies, which should have played a role to avoid risk, to a position of commonly accepted target of national law and regulations. In the post-financial crisis era, China’s capital market has just started and is still in the stage of development. Although the financial crisis has caused it detriment, it must wake up from the dream of the Wall Street myth and face the series of problems of its own credit rating agencies:the lack of competitiveness, inadequate market development, hiring unqualified employees and other issues, and take active measures to prevent and control the potential financial risks.While the repercussion of financial crisis is far to an end, Europe sovereign debt crisis comes in a throng. In order to maintain a normal market order and to ensure healthy development of China’s financial industry, to establish and improve the regulations on credit rating agencies in China has become the task of first priority. By a combination of comparative study and inductive study, based on the comparative analysis of the legal regulations on credit rating agencies of various countries in the financial crisis and the current development of our credit rating agencies, this essay tentatively proposes suggestions on the legal regulation of credit rating agencies, namely the admittance and exit mechanism of credit rating market, business compliance and credit rating agencies liabilities.