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Expected effects of the opening of the on-shore credit ratings’ market in China for the Big Three and its rationale

Author

Listed:
  • Paweł Niedziółka

    (Warsaw School of Economics, Collegium of Socio-Economics)

Abstract

The research focuses on the determination of the directions of development of the CRA market in China in the context of its opening for the Big Three as well as current economic challenges. Two sets of hypotheses are being considered. The first one assumes that the liberalisation of access rules for foreign CRAs is designed to attract foreign capital and direct it to the sectors characterised by relatively high indebtedness. The second hypothesis states that the certification effect and credibility to be gained by Chinese CRAs in the corporate bond markets due to the improvement of their competencies, fiercer competition and tightening of supervisory approach may be transferred to the sovereign ratings segment.

Suggested Citation

  • Paweł Niedziółka, 2020. "Expected effects of the opening of the on-shore credit ratings’ market in China for the Big Three and its rationale," Bank i Kredyt, Narodowy Bank Polski, vol. 51(2), pages 189-210.
    • Handle: RePEc:nbp:nbpbik:v:51:y:2020:i:2:p:189-210
    as

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    File URL: https://bankikredyt.nbp.pl/content/2020/02/BIK_02_2020_04.pdf
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    References listed on IDEAS

    as
    1. Livingston, Miles & Poon, Winnie P.H. & Zhou, Lei, 2018. "Are Chinese credit ratings relevant? A study of the Chinese bond market and credit rating industry," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 216-232.
    2. Raghav Dhawan & Fan Yu, 2015. "Are Credit Ratings Relevant in China’s Corporate Bond Market?," Chinese Economy, Taylor & Francis Journals, vol. 48(3), pages 235-250, May.
    3. Marlene Amstad & Zhiguo He, 2019. "Chinese Bond Market and Interbank Market," NBER Working Papers 25549, National Bureau of Economic Research, Inc.
    4. Norbert Gaillard, 2012. "A Century of Sovereign Ratings," Springer Books, Springer, number 978-1-4614-0523-8, January.
    5. Bae, Kee-Hong & Driss, Hamdi & Roberts, Gordon S., 2019. "Does competition affect ratings quality? Evidence from Canadian corporate bonds," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 605-623.
    6. Poon, Winnie P.H. & Chan, Kam C., 2008. "An empirical examination of the informational content of credit ratings in China," Journal of Business Research, Elsevier, vol. 61(7), pages 790-797, July.
    7. Jing Bian, 2015. "Regulating the Chinese credit rating agencies: progress and challenges," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 18(1), pages 66-80, January.
    8. Xianfeng Jiang & Frank Packer, 2017. "Credit ratings of domestic and global agencies: What drives the differences in China and how are they priced?," BIS Working Papers 648, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises

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