Status And Policy Suggestions On Supervision Of Credit Rating Industry In China

Credit rating agencies,known as "gatekeepers" of the bond market,failed to effectively reveal risks during the 2008 financial crisis.After the crisis,strengthening the supervision of the credit rating industry has become the consensus of the international community.Many countries have issued relevant regulations to improve the supervision system of the credit rating industry.China's credit rating industry started late and has not yet formed a unified regulatory mechanism,which to a certain extent led to over-rating,lack of credibility and other issues.Based on this,this paper analyses and studies the problems existing in the supervision of China's credit rating industry.Through the research,we find that there are still some deficiencies in the supervision of credit rating industry in China,such as supervision body,conflict of interest management,information disclosure management and supervision means.In the aspect of supervision body,the rating industry in China is still in a "separate" state,which leads to overlap of supervision,increases the cost of supervision,and reduces the efficiency of supervision.By comparing the regulatory regulations of various supervision bodies,it is found that there are differences in industry access,business supervision and other aspects,which will undoubtedly have some impact on the authority of the industry,but also easily lead to regulatory arbitrage,disorderly competition and hinder the healthy development of the industry.In the aspect of conflict of interest management,it shows that the inherent defects of the issuer-paid mechanism lead to the problems of over-rating,poor rating quality and failure to play the role of risk-alert,by displaying the content of the distribution of bond grade and rapid downgrade of the rating level before default under the issuer-paid credit rating agencies and comparison of the rating results under different payment modes of credit rating agencies.At the same time,taking the "Dagong Incident" in 2018 as an example,this paper explains the serious impact of consulting business on the conflict of interests.It also confirms the existence of "rating level purchase" phenomenon in rating industry,which results in serious damage to the independence of rating agencies.It also reveals the conflict of interests between issuer-paid credit rating agencies and issuers and the necessity of their supervision from different perspectives.In the aspect of information disclosure,by analyzing the requirements of the existing relevant systems,this paper expounds that there are still some problems in the current regulatory requirements,such as inconsistency,low requirements and weak intensity,which aggravate the information asymmetry and further lead to distortions in the allocation of market resources.In the aspect of regulatory means,by comparing the penalty cases of rating industry in Europe and the United States in recent years,this paper expounds the current regulatory penalties of credit rating industry in China is weak and low cost of non-compliance,which lead to higher risk of compliance in the industry as a whole.In addition,by sorting out the current situation and trend of regulation in developed areas such as the United States and the European Union,we can see that the regulation of credit rating industry in Europe and the United States is characterized by higher level of legislation,more unified regulatory bodies,more detailed management over conflicts of interest and information disclosure,more intensive supervision and punishment,which provides valuable practical experience for improving the supervision of rating industry in China.Based on a comprehensive analysis of the causes of the problems,combined with the practical experience of oversea supervision and the actual situation in China,this paper puts forward some policy suggestions,such as unifying supervision body,improving conflict of interest management,enhancing information disclosure management,strengthening self-discipline management and punishment,and reducing rating dependence.