The Credit Rating In Asset Securitization

Asset-backed security (ABS) is a new financing technique. With its unique operating mechanism, ABS has become a new favorite in the capital market around the world. These years in Chinese capital market ABS has been put into practice, but the ABS in China is still in the exploratory stage. In 2007,the U.S. subprime mortgage crisis caused a worldwide financial crisis, ABS and credit rating agencies also thrust into the media air waves, The performance of credit rating agencies in securitization product sparked questions, people think more about the conflict of interest and the integrity of the credit rating agencies. China's current credit rating industry is not yet well developed, the credit rating in securitization product has just started, there are still some problems ,for example the lag of the legal system, and the insufficient strength of domestic agencies. This thesis analyzes the legal status and role of credit agencies in the securitization, by referring to foreign legal system, analyzing the problem of credit rating agencies during the financial crisis, makes recommendations on the rating industry.This thesis'main body is composed for chapters, aside from introduction and conclusion.The first chapter is the basic theory of ABS. It gives the definition and reveals the legal nature of ABS, briefly describes the process of securitization.The second chapter is a general description of credit rating in securitization. Firstly gives the definition of credit rating and tells the importance of it. Also analyzes the legal status of credit rating agencies in securitization, including the legal status in capital market and the legal relationship between the agencies and the SPV or investors.The third chapter is the foreign and domestic legal system of credit rating, and analysis of existing problems. Covering the market access system, the specification for business and the supervision system of the credit rating. Also it analyzes the existing problem of credit rating agencies during the subprime mortgage crisis.The forth chapter is proposal to the establishment of our credit rating system. first, it raises China should develop our domestic credit rating agencies, tells the importance and how to develop it; second, gives some proposal to the supervision system, including to determine a unified regulatory, make unified licensing system and so on; third, proposes ways to improve the rules of business, most important is to establish"The Chinese Wall", and to strengthen information disclosure; finally, it raises to improve the legal liabilities of credit rating agencies, especially the civil liability.