scholarly journals THE ROLE OF AUDIT AND CREDIT RATING AGENCIES IN THE ASSESSMENT OF COMPANY CREDITWORTHINESS WITH SPECIAL FOCUS ON BANKS

2019 ◽  
pp. 089
Author(s):  
Mirjana Jemović ◽  
Milica Đorđević ◽  
Jelena Radojičić
Keyword(s):  
Financial Institutions ◽  
Credit Rating ◽  
Fiscal Year ◽  
Credit Rating Agencies ◽  
Special Focus ◽  
Delayed Reaction ◽  
Rating Agencies ◽  
Crisis Events ◽  
Regulatory Bodies

Audit and credit rating agencies have a significant responsibility in assessing company creditworthiness and giving opinions on the client’s ability to continue business in the future, most often the next fiscal year. Responsibility is even greater when it comes to banks and their creditworthiness. The financial crisis of 2007 and the bankruptcy of a number of banks and other financial institutions imposed a need to seek accountability for the “delayed” reaction of regulatory bodies and significant fiscal consequences of the crisis. The aim of the paper is to evaluate the efficiency of credit rating agencies and external audit in assessing the creditworthiness of companies and banks, not for the purpose of finding their individual responsibilities, but to look at possible coordinated and joint actions to prevent future crisis events.

scholarly journals U-8 The Concept, Need and Significance of Sharia rating in Islamic Financial institutions in the perspective of Credit Rating Agencies

2021 ◽  
Vol 5 (1) ◽  
pp. 111-129
Author(s):  
Muhammad Mushtaq Ahmed ◽  
Javed Khan
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Credit Rating ◽  
Financial Institution ◽  
Credit Rating Agencies ◽  
Financial Industry ◽  
Rating Agencies ◽  
The Public ◽  
Islamic Financial Institutions ◽  
Regulatory Bodies

Sharia compliance is considered the basic component of Islamic financial industry as sharia permissibility is one of the basic motive for majority of the customers of Islamic Financial services. Presently the assurance regarding the sharia compliance of Islamic financial institution is given by the Sharia Advisor or Sharia board of respective Islamic financial institution. But there is no process, similar to the credit rating agencies, which provides the public an independent assessment of the commitment of different Islamic financial institution as regard to follow sharia injunctions in true letter and spirit for comparison with other Islamic financial institution. In this paper, the concept of credit rating, its origin, importance and advantages are discussed. In the light of the credit rating agencies practices, the concept of sharia rating and its importance are elaborated. It is observed and recommended that sharia quality rating will be very beneficial for all the stakeholders of the Islamic financial institutions as well the Islamic financial industry hence regulatory bodies of Islamic financial institutions, IFI’s and Credit Rating Agencies shall work together to further refine the concept for implementation of Sharia rating in the industry.

scholarly journals Information as a condition of justice in financial markets: The regulation of credit-rating agencies

2017 ◽  
Author(s):  
Boudewijn de Bruin
Keyword(s):  
Credit Risk ◽  
Financial Markets ◽  
Institutional Investors ◽  
Credit Rating ◽  
Credit Rating Agencies ◽  
Informational Needs ◽  
Sources Of Information ◽  
Rating Agencies ◽  
Mortgage Backed Securities

This chapter argues for deregulation of the credit-rating market. Credit-rating agencies are supposed to contribute to the informational needs of investors trading bonds. They provide ratings of debt issued by corporations and governments, as well as of structured debt instruments (e.g. mortgage-backed securities). As many academics, regulators, and commentators have pointed out, the ratings of structured instruments turned out to be highly inaccurate, and, as a result, they have argued for tighter regulation of the industry. This chapter shows, however, that the role of credit-rating agencies in achieving justice in finance is not as great as these commentators believe. It therefore argues instead for deregulation. Since the 1930s, lawgivers have unjustifiably elevated the rating agencies into official, legally binding sources of information concerning credit risk, thereby unjustifiably causing many institutional investors to outsource their epistemic responsibilities, that is, their responsibility to investigate credit risk themselves.

Are sukuk debt or equity? A classification of sukuk by regulatory bodies and credit rating agencies

2019 ◽  
Vol 7 (2) ◽  
pp. 75
Author(s):  
Rafisah Mat Radzi ◽  
Nurul Aini Muhamed
Keyword(s):  
Capital Market ◽  
Credit Rating ◽  
Islamic Law ◽  
Cash Flows ◽  
Credit Rating Agencies ◽  
Rating Agencies ◽  
Regulatory Bodies

Sukuk (Islamic bonds) are the Shariah (Islamic law) instrument that serves as an alternative to conventional bonds that are used in the modern capital market. In theory, sukuk represent a form of equity as they represent certificates conferring ownership to holders of an asset or pool of assets or claim to its cash flows. In practice, they have become known as Islamic bonds with their investors holding debt. Following the question of whether sukuk are debt or equity, this paper aims to classify sukuk from the perspective of regulatory bodies and credit rating agencies. Furthermore, to what extent the innovations in this Islamic instrument make it differ substantially from conventional bonds in practice will be examined.

India will struggle to revive growth quickly

2020 ◽  
Keyword(s):  
Credit Rating ◽  
Prime Minister ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Credit Rating Agencies ◽  
Fiscal Deficit ◽  
Content Type ◽  
Rating Agencies ◽  
Goods And Services ◽  
Finance Minister

Subject Outlook for India's economy following the 2020/21 budget. Significance Prime Minister Narendra Modi’s government estimates that GDP growth for fiscal year 2019/20 (April-March) will be 5.0%, the lowest full-year rate in eleven years. Finance Minister Nirmala Sitharaman earlier this month presented a budget for 2020/21 and said growth would pick up to 6.0-6.5% in that year. Impacts Further widening of the fiscal deficit could prompt credit rating agencies to downgrade India’s outlook. Some states may try to reclaim powers of taxation that they surrendered when the Modi government introduced the Goods and Services Tax. Modi will double down on efforts to promote the ‘Make in India’ initiative, which is designed to increase domestic manufacturing.

Sign in / Sign up

Export Citation Format

Share Document