ANALYSIS ON REGULATION OF CREDIT RATING AGENCY IN RUSSIA AND POLICY RECOMMENDATIONS
(41-49)

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Hwang Jeeyoung Post-graduate student at the department of Applied institutional economics
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Background: There is some information asymmetry between financial market participants. Credit rating agencies (CRAs) are meant to correct it. However, they have inherent problems in their own structure and operations, such as conflict of interests, lack of transparency and accountability of credit rating services, etc. Russia has just recently introduced its own regulation of CRAs and hence local and foreign CRAs in Russia should prepare for documents to comply with regulatory and legal requirements of the Central Bank. Now, it will be appropriate to analyze these new regulations. Materials and methods: Federal law of 13 July 2015 №222-FZ on the Activities of Credit Rating Agencies in the Russian Federation is analyzed, based on the economic theory. Results: This regulation adequately fulfills its own objectives but still have some deficiencies. So the Russian regulators need to take into account effective systems of legal accountability in credit rating agencies to protect the rights of market participants. Moreover, it is important to organize Association of CRAs, as being a third party, to exercise monitoring over the credit rating performance. Conclusion: Therefore, we can draw a conclusion that regulation authority should consider administrative monetary penalty systems. Also, activities of CRAs in Russia need to be regularly monitored by Central Bank and self-regulated organization, i.e. Association of CRAs in Russia.
How to Cite:
Hwang J.., (2016), ANALYSIS ON REGULATION OF CREDIT RATING AGENCY IN RUSSIA AND POLICY RECOMMENDATIONS. Business in Law, 5: 41-49.
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Keywords:
credit rating agencies, a conflict of interest, regulation, the regulator.