Research On Tort Liability About Credit Rating Agencies

Today, with the development of credit economy and the specialization in thefinancial market, the credit rating agencies as the intermediary service organizationsin the financial market have an important role. The credit rating agencies can solvethe problems of the asymmetric information in the financial market, reduce financingcosts, reduce the investment risk of the public investors, promote the benignoperation and healthy development of the financial market, and even to be theregulatory means and market access standards of the government and regulatoryauthorities, known as the “guardian” of the investors and the “gatekeeper” of thecapital market. However, the outbreak of the subprime crisis in the USA, exposingthe major problem on the controling of moral risk and the standards of the rating,even causing serious doubts on the objectivity, fairness and accuracy of the creditrating agencies in the world. Whether credit rating agencies should be liable for theirwrong rating? When the wrong rating lead to the losses, the rating agencies shoudtake what kind of legal responsibility? The study of this problem is relatively welldeveloped in the United States.In the history of the American judicial practice therehave been a lot of jurisprudence, and more based on the grounds of civil liability forthe lawsuit brought. After the financial crisis, the United States also issued relatedlaw on civil liability of credit rating agencies for further regulation. However, due tothe lack of theoretical achievements and mature jurisprudence, the discussion of thisissue is very poor in our country. But with the rapid development of the securitiesmarket in our country, the problems faced by the credit rating agencies will also bemore and more complex, the reseach about the liability of credit rating agencies isnecessary.Through the analysis of the legal relationship between the credit rating agenciesand related entities, and even the jurisprudence,we find that legal accountability ofcredit rating agencies are mainly two ways of breach of contract and tort. Liabilityfor breach of contract is easy to control because of the contract, the two sides have a contractual relationship, liability for breach of the rights and obligations which canbe based on the contract signed by both parties, relatively easy to analyse anddefine,but the tort liability because there is no contract for the rights and obligationsof both direct regulations, the legal analysis of the relationship and the legalresponsibility to define is very complex. Therefore, the author will focus on the tortliability of credit rating agencies, learning the experience of the relevant provisionsof the United States and the mature jurisprudence,using case studies and comparativeanalysis to discuss and analyse the tort liability of credit rating agencies. Throughanalyse civil subject status of the credit rating agencies and their civil legal relationsbetween the related entities, and thus to define the tort liability of credit ratingagencies, discuss the principle of attribution and its constituent elements. Finally, theauthor summarizes the legislative defects of the tort liability system of credit ratingagencies in China and put forward the suggestions for improvement.The author hope the study of the tort liability about credit rating agencies willhave the certain value in the healthy and orderly development of the credit ratingindustry,have a positive impact on the maintain of independence, better play the roleof intermediary services.