Original title: Five ministries including the Central Bank jointly issued a document to regulate the development of the credit rating industry and improve the quality of credit ratings
On August 6, the central bank and other five ministries and commissions jointly issued a notice requesting to effectively improve the quality of credit ratings, support the stable and healthy development of the bond market, and promote credit rating agencies to effectively play the role of “gatekeepers” in the bond market.
This notice mainly puts forward clear requirements on rating agencies from five aspects, including strengthening the construction of rating method systems, improving corporate governance and internal control mechanisms, and strengthening information disclosure.
Simply put, credit rating is to evaluate the possibility of full repayment of principal and interest when a bond matures. Rating symbols such as AAA and AA reflect the degree of credit risk. Credit ratings serve the risk pricing of the bond market and reveal risks, and are an important reference for investors in investment decisions.
Industry insiders said that with the development of the bond market, my country’s rating industry has begun to take shape, but many problems have also been exposed.
Li Xin, general manager of the ChinaBond Credit Enterprise Institutional Headquarters: The phenomenon of inflated grades is very prominent. The grade distribution is an intuitive reflection of the rating standards and an important indicator to measure whether the grades are inflated. The rating centers of domestic rating agencies are concentrated near AA+. The number of AA and above companies accounts for nearly 90%, while the proportion of AAA-level companies in developed bond markets such as the United States and Japan does not exceed 5%. From the perspective of level adjustments, in the past five years, the average number of credit ratings of domestic bond issuers has been increased by 3.6 times.
At present, the role of risk disclosure in the rating industry is insufficient
In addition, industry insiders said that the current rating industry risk revealing role, rating accuracy and forward-looking is insufficient.
Li Xin, general manager of the ChinaBond Credit Enterprise Headquarters: Last year, Yongmei Holdings, which received widespread market attention and broke out of default incidents, had a principal credit rating of AAA before the incident, and a cliff-like downgrade to BB afterwards. The entity level has become obvious. Cannot truly reflect credit status. “Insufficient early warning and sharp downward adjustment after the event” are important triggers that aggravate market volatility and induce systemic risks.
This notice is to focus on these key issues and comprehensively regulate the internal construction of rating agencies and the external rating ecology. This will promote the overall level distribution of the bond market to be more reasonable and scientific, improve the quality and competitiveness of my country’s credit ratings, and thereby Promote the healthy development of the entire bond market.
Li Xin, general manager of the ChinaBond Credit Corporate Headquarters: Focusing on the most critical and urgently needed rating quality issues in the current rating industry will help to gradually improve the accuracy of rating results, and rating agencies will gradually return to better reveal risks, Service bond pricing reference and other functions.
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