The Quality Analysis Of Bond Credit Rating In China Basing On Conformance Check

As the rigid payment of bond market in China has been broken,the frequent occurrence of bond default events has greatly aroused the attention of market participants on the quality of credit rating.At the same time,the quality of credit rating gradually becomes the focus of academic field.Some scholars have engaged in the research that is about choosing which method to evaluate the quality of credit rating.Such methods are relatively market implicit rating method based on the domestic market information of,credit spread tests and linear regression method guided by margin yielding.However,all these methods are noscientifically proved.Currently,authorized credit rating agencies in Europe and America generally adopt default rate test which is commonly considered the most straightforward method to assess the quality of credit rating.If the rating is of high quality,the higher the rate of the bond is,the lower the corresbonding default rate is.Before 2014,there are lack of substantive events of default in domestic bond market,thus,default rate test cannot be done because of inadequate cumulative historical data.But in recent years,owing to the slowdown in economic growth and expanding of the bond market as well as the product diversification,events of bond default occurred in succession,which lays a great foundation to carry out the default rate test.In this research,public offering bonds issued from 2014 to 2017 are the test samples.By relatively calculating the default rate,marginal default rate and cumulative default rate in each year from 2014 to 2017,we can make a conclusion that there is not a strict monotonicity between rating and default.The consequence of the credit rating is unideal,the causes of which are the rating techniques are immatured and the existence of the conflicts.If the quality can't be improved,it is likely to exacerbate the bond market information asymmetry and boosting the expansion of the risk as well as hindering the bond market internationalization.Basing on the reasons which cause the inferior quality of credit rating,this paper puts forward the corresponding countermeasures and suggestions.The process of conformance check and the empirical results provide a certain amount of information for investors in the bond market.