Reputation Mechanism, Credit Rating And Credit Asset Securitization Financing Cost

In recent years,China's credit asset securitization market has continued to expand,and the development of this market has played an important role in China's banking system,financial system and even economic development.However,due to the complexity of credit asset securitization process,there is a serious information asymmetry between investors and issuers in the market,and information asymmetry will lead to a series of small transactions and poor liquidity.The problem will also lead to higher issuer financing costs.As a third-party organization for professional information collection and analysis,credit rating agencies are considered to be able to alleviate information asymmetry and reduce financing costs.Therefore,this paper explores the credit rating in China's credit asset securitization market through relevant research design.The impact on financing costs.The impact of credit rating issued by rating agencies with different reputation levels on financing costs was further compared,and the impact of credit ratings issued by rating agencies with different payment models on financing costs was compared.In order to explore the role of rating agencies in China's credit asset securitization market and related issues,this paper collects empirical data on credit asset-backed securities from January 2016 to July 2018 in China's credit asset securitization market.And put forward corresponding policy recommendations for relevant conclusions.The results show that:(1)The higher the credit rating,the lower the financing cost of credit asset-backed securities.Based on previous research and assumptions,the credit rating can alleviate the information asymmetry to a certain extent,so that the better quality securities can be better priced,thus reducing the financing costs of the corresponding issuers.(2)The higher the reputation of the rating agency,the greater the reduction in financing costs.This shows that the ratings issued by high-reputation rating agencies are more recognized by the market,which can better alleviate the information asymmetry in the market.It also shows that the reputation mechanism does play a role in China's credit asset securitization market.(3)There are two payment modes: issuer payment and investor payment in the credit asset securitization market.The former has a higher rating on the financing cost than the latter.It shows that in the credit asset securitization market,investors are more likely to recognize the issuer's payment model.The credit rating mechanism with the monopolistic investor payment model can't better solve the problem of information asymmetry in the market.Therefore,institutional innovation and payment model innovation should be further promoted to promote the role of reputation mechanism,so that rating agencies can better mitigate information asymmetry.This paper not only studies the impact of credit rating on financing costs in the credit asset securitization market,but also further studies the impact of credit rating on the financing cost caused by the different reputation mechanism and payment model of the rating agency.Combined with previous studies,the role of credit rating agencies and their reputation mechanisms and payment models in information asymmetry in the credit asset securitization market is revealed.The final empirical analysis not only provides the issuer with the choice of credit rating agencies for issuing credit asset-backed securities,but also provides suggestions for problem solving and development of the credit asset securitization market.