The Research On The Regulation Rating On Rural Credit Cooperatives

Regulation rating is not only the important reference to scientific and crucial evaluation on operating conditions and risks of financial institutions, conducting classification regulation, allocating regulation resources reasonably; but also the effective way to recognizing the operating conditions of themselves, improving the risk profile for the supervised financial institutions. However, under the ground of gradual depth of rural finance in China, the rural financial institutions regulation rating system based on modern commercial bank management system has presented many defects in practice which reducing the efficiency of regulation rating. With the evolution and development of rural financial institution, improving rural financial institutions regulation rating system is one of the important things in evolution of rural financial institutions at this stage and also is the further impetus to promote rural economic development.This article is based on the rural credit cooperatives regulation rating research, starting with the related theory of financial regulation, believing regulation rating has important function in solving financial market failure. Then elaborating from three aspects:first conducts a comprehensive analysis towards the regulatory authorities’ work on rural credit cooperatives regulation rating, presents the regulation rating system’s accomplishments on reflecting the operating conditions and risks evaluation as well as shortcomings in index setting, weight constitution, results implantation. Second constructs a evolutionary game model to guide the rural credit cooperatives improve their rating condition from the view of financial institutions cost-benefit analysis, the result of the game indicates that strengthening market reputation incentive and regulatory authorities’support can help to increase the activity to improve the ratings of rural credit cooperatives and make the financial institutions’ self-serving behavior and the regulatory authorities’maintaining stability target to be a unity. Last analyzes and compares the main characteristics of regulation rating system of America, the UK and Canada, provides ideas for improving rural credit cooperatives regulation rating system in China. On this basis, this article put forward four suggestions from the view of improving rating system and constructing regulation rating incentive mechanism.