The Research On Regulation Of The Standards Development Problems Of China’s Credit Rating Industry

In2007, after the outbreak of the sub-prime mortgage crisis sweeping the globe, the three internationally renowned credit rating agencies responded to this incident quickly, and then lowered the credit rating grade of major financial derivative products. This behavior makes the sub-prime mortgage crisis has further deepened the impact of the crisis, which has spread even more rapidly, and leads to the further expansion of the degree of harm, and further spread to the global financial industries. The global financial crisis has bad effects on the real economy gradually, which gets investors to suffer huge losses and leads to financial institutions, the automotive industry, high-tech industry has begun large-scale layoffs, and the rising unemployment brought about by insecurity makes the level of consumption and investment falling of society as a whole, economic growth slowed, or even a recession. In the context of economic globalization, the existence of multinational companies and the blend of trade, culture, economy of every country makes this sub-prime mortgage crisis a terrible financial turmoil extended to the global, and economic growth of all countries are subject to a negative impact.It is the specialized rating technology that the credit rating industry uses has brought tremendous role in promoting world economic and financial development, but at the same time plays an important role in guiding the optimal allocation of global resources. Objective and fair credit rating agencies will promote the sound development of the global economy, if the credit rating agencies is used by certain organizations, which will bring about not objective and fair rating results and this will be a major impediment to economic development. It can be said that the credit rating industry is a booster of the global economy, but also may lead to dangerous goods of the global economic turmoil.After this large-scale financial crisis, the three major credit rating agencies Moody’s, Standard&Poor’s, Fitch due to the lack of sensitivity to the potential financial crisis response, failed to play a good role in early warning, but quickly downgrade the structured bond’s credit rating leading too the market panic after the crisis, given the role in fueling the crisis that deepen this crisis and the extent of damage. This series of unfair means of operation makes it had to be directed at the three credit rating agencies, pushing them to the cusp of the financial crisis continue to spread, so that make them in embarrassment. People have questioned these well-known international credit rating agencies in the selection of rating models, rating methods, and information gathering, rating the credit risk of financial products to measure the lack of such processes. The credit rating agencies rating produced a great deal of misleading and unfair to the majority of the investors and they shall bear the major responsibility in the current financial crisis.Therefore, we urgently need to establish an objective, impartial and independent credit rating system, to make a neutral credit rating on the economy, which relates to the survival and development of assessed enterprise, and relates more to the vital interests of the country.After one hundred years’development, the international credit rating industry has made great progress not only in the credit rating model and the database selecting but also in establishing the method to use and risk measurement and so on, which results in a more systematic understanding and development, and gradually establish a more mature and perfect rating system. The founder of China’s credit rating agencies and bond market development in China is closely related to progress with the rise of the bond market. China’s credit rating industry development so far has been a considerable success, but we should see many of the inadequacies, and continues to promote its development and progress through various efforts.Facing the situation that the three major credit rating agencies suffer from serious doubts after the sub-prime mortgage crisis, China should seize the good opportunities for development, to fully learn from the advanced experience of foreign credit rating agencies, but shed its shortcomings. And we should base on China’s specific national conditions to build from the rating the main mode of rating and rating methodology selection, various aspects of the rating industry system construction, and the cultivation of rating system to explore the road of development suited to China’s credit rating agencies continue to enhance our right to speak of the credit rating agencies in the international arena, and thus to contribute to the protection of our national financial system safety, security and China’s economic resources and optimize the allocation of resources.In this paper, the role played by credit rating agencies in the U.S sub-prime mortgage crisis has exposed the nature of problems, we use the city voted bonds for the case to analyze the current development status of the credit rating industry in China, the rating model and rating methodologies. After the comparison and analysis of the rating industry at home and abroad of the main existing differences, we come up with the suggestion that how to improve our credit rating industry to build and the construction of rating independence, the main build process and coordination of government regulation, how to regulate the development of constructive comments and improvement of the credit rating industry suited to China’s specific national conditions in many ways.The innovation of this paper is based on actual case studies, combined with the development of China’s specific national conditions of China’s credit rating agencies more closely, for their constructive comments on this basis for the development of the credit rating industry in China has played a substantive guiding role.Shortcomings of this paper lies in the emphasis on rating agencies at fault, did not fully consider the nature of the rating agencies’ own property; criticism of rating agencies, not from other areas, such as the information provided by the issuer is true or not and other shows on the rating agencies suffered accusations are completely reasonable; no detailed study on the role of the rating system in each plate and built; At the same time, due to the short history of the development of China’s credit rating agencies, whose development is not perfect and in this paper, data collection may face greater difficulties for lack of data.