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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References
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Brusov, P., Filatova, T., Orekhova, N. (2021). Recommendations to International Rating Agencies (Big Three (Standard & Poor’s, Fitch, and Moody’s), European, and National Ones (ACRA, Chinese, etc.)). In: Ratings. Contributions to Finance and Accounting. Springer, Cham. https://doi.org/10.1007/978-3-030-56243-4_19
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DOI: https://doi.org/10.1007/978-3-030-56243-4_19
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