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2021 | OriginalPaper | Chapter

19. Recommendations to International Rating Agencies (Big Three (Standard & Poor’s, Fitch, and Moody’s), European, and National Ones (ACRA, Chinese, etc.))

Authors : Peter Brusov, Tatiana Filatova, Natali Orekhova

Published in: Ratings

Publisher: Springer International Publishing

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Abstract

The studies performed in this monograph provide a new basis for the rating methodology. Rating agencies, both international and national, should apply the developed approach when assessing the creditworthiness of issuers.

The proposed improvement of the rating methodology of existing rating systems will improve the accuracy of generated ratings and make them more objective. Using in rating methods the modern theory of corporate finance allows us to move in the rating industry from using mainly qualitative rating methods to using mainly quantitative methods, which opens up new horizons in ratings of issuers and in methods for determining their creditworthiness.

The proposed fundamentally new approach to the rating methodology includes an adequate application of discounting, which is practically not used in existing rating methodologies when discounting the financial flows; the use of rating parameters upon discounting; and the correct determination of discount rates taking into account financial ratios.

In this chapter based on the results of this monograph, we give some recommendations to international rating agencies (Big Three (Standard & Poor’s, Fitch, and Moody’s), European, and national ones (ACRA, Chinese, etc.)).

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previous chapter The Impact of Taxing and Leverage in Evaluation of Capital Cost, Capitalization of the Company and Issued Ratings

next chapter Conclusions

Brusov P (2018a) Editorial: introduction on special issue on the Banking System and financial markets of Russia and other countries: problems and prospects. J Rev Global Econ 7:i–vi. SCOPUS

Brusov P (2018b) Editorial. J Rev Global Econ 7:i–v. SCOPUS

Brusov P, Filatova T, Orekhova N, Eskindarov M (2015) Modern corporate finance, investments and taxation. Springer International Publishing, Switzerland, 373 p. monograph. SCOPUS. https://www.springer.com/gp/book/9783319147314

Brusov PN, Filatova TV, Orekhova NP, Kulik VL (2018a) Rating: new approach. J Rev Global Econ 7:37–62. SCOPUS. https://doi.org/10.6000/1929-7092.2018.07.05CrossRef

Brusov PN, Filatova TV, Orekhova NP, Kulik VL (2018b) A “golden age” of the companies: conditions of its existence. J Rev Global Econ 7:88–103. SCOPUS. https://doi.org/10.6000/1929-7092.2018.07.07CrossRef

Brusov PN, Filatova TV, Orekhova NP, Kulik VL (2018c) Rating methodology: new look and new horizons. J Rev Global Econ 7:63–87. SCOPUS. https://doi.org/10.6000/1929-7092.2018.07.06CrossRef

Brusov PN, Filatova TV, Orekhova NP (2018d) Modern corporate finance and investments, mono-graph. Knorus Publishing House, Moscow, 517 p

Brusov P, Filatova T, Orekhova N, Eskindarov M (2018e) Modern corporate finance, investments, taxation and ratings. Springer Nature Publishing, Switzerland, 571 p. monograph

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Brusov PN, Filatova TV, Orekhova NP, Kulik VL, Weil I (2019) Ratings of the investment projects of arbitrary durations: new methodology. J Rev Global Econ 8:437–448. SCOPUS. https://doi.org/10.6000/1929-7092.2019.08.37CrossRef

Brusov PN, Filatova TV, Orekhova NP, Kulik VL, Chang S-I, Lin YCG (2020) Modification of the Modigliani–Miller theory for the case of advance payments of tax on profit. J Rev Global Econ 9:257–268CrossRef

Brusov P, Filatova T, Orekhova N, Kulik V, Weil I, Brailov A (2018) The impact of the central bank key rate and commercial banks credit rates on creating and maintaining of a favorable investment climate in the country. J Rev Global Econ 7:360–376. SCOPUS. https://doi.org/10.6000/1929-7092.2018.07.31CrossRef

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Filatova TV, Brusov PN, Orekhova NP, Kulik VL (2018) Ratings of the long–term projects: new approach. J Rev Global Econ 7:645–661. SCOPUS. https://doi.org/10.6000/1929-7092.2018.07.59CrossRef

Title: Recommendations to International Rating Agencies (Big Three (Standard & Poor’s, Fitch, and Moody’s), European, and National Ones (ACRA, Chinese, etc.))
Authors: Peter Brusov
Tatiana Filatova
Natali Orekhova
Publisher: Springer International Publishing
Book: Ratings
Print ISBN: 978-3-030-56242-7

Electronic ISBN: 978-3-030-56243-4

Copyright Year: 2021
DOI: https://doi.org/10.1007/978-3-030-56243-4_19