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Kreditvärderingsinstitut som auktoritet: En jämförelse av lagstiftarens motiv och verklighetens effekter

Widnersson, Filip LU (2011) JURM01 20111
Department of Law
Abstract (Swedish)
Uppsatsen behandlar i huvudsak kreditvärderingsinstitutens auktoritära roll på kreditmarknaderna samt hur lagstiftarens inkorporering av kreditvärderingsbetyg har påverkat det finansiella systemet.
Målet är att pragmatiskt granska lagstiftarens motiv med inkorporering av kreditvärderingsbetyg i kapitaltäckningsregelverket samt att föreslå möjliga förändringar i de fall brister anses föreligga. Syftet är att slå ett slag för starkare koppling mellan finansiell lagstiftning och dess effekt på ekonomiska system i verkligheten. Analysen struktureras genom en teoretisk ram för granskning av lagstiftarens motiv utifrån (a) nödvändighet, (b) proportionalitet samt hur motivet (b) svarar mot verkligheten.
Utifrån lagstiftarens motiv med ökad... (More)
Uppsatsen behandlar i huvudsak kreditvärderingsinstitutens auktoritära roll på kreditmarknaderna samt hur lagstiftarens inkorporering av kreditvärderingsbetyg har påverkat det finansiella systemet.
Målet är att pragmatiskt granska lagstiftarens motiv med inkorporering av kreditvärderingsbetyg i kapitaltäckningsregelverket samt att föreslå möjliga förändringar i de fall brister anses föreligga. Syftet är att slå ett slag för starkare koppling mellan finansiell lagstiftning och dess effekt på ekonomiska system i verkligheten. Analysen struktureras genom en teoretisk ram för granskning av lagstiftarens motiv utifrån (a) nödvändighet, (b) proportionalitet samt hur motivet (b) svarar mot verkligheten.
Utifrån lagstiftarens motiv med ökad effektivitet samt stabilitet i det finansiella systemet är min slutsats att (a) nödvändigheten inte kan anses klarlagd. Detta då litteraturstudien ej funnit kvantitativ forskning till stöd för kreditvärderingsbetygs prognosvärde, samt att det potentiellt kan finnas andra lika väl fungerande kreditriskbedömningsmodeller med mindre inskränkande verkan på bland annat frihet och demokrati. (b) Vidare får det anses ytterst tveksamt att rimlig proportionalitet föreligger; detta mot bakgrund av regleringens tvingande karaktär med möjligen otillbörligt gynnande av privata och vinstdrivande företag. (c) Till sist kan lagstiftarens motiv genom inkorporering av kreditvärderingsbetyg inte anses fungera i verkligheten. Det är till och med så att regleringen potentiellt har minskat det finansiella systemets stabilitet i fler fall. Som motiv för detta svar pekar jag på det åläggande av stor skuld som lagts på kreditvärderingsinstituten som led i orsak till den globala finanskrisen. Därtill motiveras svaret tillsammans med finansiell reglerings allmänt innovationshämmande verkan.
Med anledning av att motivet ej kan anses ha befogat inkorporeringens verkliga funktion föreslås följande sammanfattade ändringar att genomföras; antingen enskilt eller men i synnerhet samtidigt:
Första steget är en avreglering av kreditvärderingskraven. Därefter föreslår jag tre alternativ: (a) Öppna upp för annan som värderar, t.ex. som branschsamarbete (effektivt; utan intressekonflikter); (b) marknadsbaserade modeller för kreditrisk (demokratiskt och effektivt, dock minskad innovation); eller (c) öka marknadernas transparens genom redovisning av emittenter eller styra mot öppna marknader. (Less)
Abstract
This thesis deals with the role of rating agencies as authorities in the debt markets; and how the legislature's incorporation of credit ratings has affected the financial system. The goal is to pragmatically examine legislator's motives when incorporating the use of credit rating opinions in capital adequacy regulations; also to propose possible changes in case of insufficiencies. The aim is to encourage stronger links between financial regulation and its impact on economic systems in the real world. The analysis will be structured through a theoretical framework that examines the legislature’s motives on the basis of (a) necessity, (b) proportionality, and how well it is (c) achieved in reality. Irrespective a legislature’s obvious... (More)
This thesis deals with the role of rating agencies as authorities in the debt markets; and how the legislature's incorporation of credit ratings has affected the financial system. The goal is to pragmatically examine legislator's motives when incorporating the use of credit rating opinions in capital adequacy regulations; also to propose possible changes in case of insufficiencies. The aim is to encourage stronger links between financial regulation and its impact on economic systems in the real world. The analysis will be structured through a theoretical framework that examines the legislature’s motives on the basis of (a) necessity, (b) proportionality, and how well it is (c) achieved in reality. Irrespective a legislature’s obvious jurisdictional competence for legislation, all three criteria must be considered present for its actions to be deemed as lawful.
My conclusion is that (a) necessity cannot with certainty be considered present when based on the legislature's motives – increased efficiency and stability of the financial system. This since the study found no quantitative research to support credit rating’s foretelling value. Hence, there may be other, equally or more efficient credit risk assessment models, less limiting on freedom and democracy if incorporated instead. Furthermore, (b) it is considered doubtful that a reasonable proportionality exists; this in light of the regulations mandatory impact, with possible favouritism of private and profit-driven companies. Finally, (c) the legislature’s motifs cannot be considered achieved in reality through the incorporation of credit ratings. It is even so that the regulation, in part, potentially has reduced the stability of the financial system. Support for this argument is for example the burden that several government linked bodies has placed on credit rating agencies as part of cause of the global financial crisis. Regulation is considered to impede innovation. Hence, incorporating credit rating might actually be a root for the lessened stability by hindering rating methods to catch up with the complexity of some products.
Given that the motifs cannot be considered as achieved, the regulation must be deemed unjustified when weighted against the imposed limitations. Therefor I suggest the following changes to be implemented (individually or preferably simultaneously): The first step is the deregulation of credit rating requirements. Then I suggest three alternatives: (a) Open up for other rating bodies, such as an industry collaboration (effective, but without conflict of interest), (b) market-based models of credit risk (democratic and effective, but still hindering innovation), or (c) increase market transparency by imposing issuers to disclose information or by pushing debt instruments to trade on exchange (reducing over the counter trades). (Less)
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author
Widnersson, Filip LU
supervisor
organization
alternative title
CREDIT RATING AGENCIES AS AUTHORITY: A COMPARISON OF THE LEGISLATURE MOTIVES AND THE REAL EFFECTS
course
JURM01 20111
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
bankrätt (en. banking law), associationsrätt, avtalsrätt, civilrätt (en. private law), EU-rätt (en. EU law), finansrätt (en. fiscal law), företagsekonomi, förmögenhetsrätt, förvaltningsrätt (en. administrative law), komparativ rätt (en. comparative law), konkurrensrätt (en. civil and criminal procedure), rättsekonomi (en law and economics), rättshistoria (en. legal history), sakrätt, statsrätt
language
Swedish
id
1977308
date added to LUP
2011-06-14 10:41:32
date last changed
2011-06-14 10:41:32
@misc{1977308,
  abstract     = {This thesis deals with the role of rating agencies as authorities in the debt markets; and how the legislature's incorporation of credit ratings has affected the financial system. The goal is to pragmatically examine legislator's motives when incorporating the use of credit rating opinions in capital adequacy regulations; also to propose possible changes in case of insufficiencies. The aim is to encourage stronger links between financial regulation and its impact on economic systems in the real world. The analysis will be structured through a theoretical framework that examines the legislature’s motives on the basis of (a) necessity, (b) proportionality, and how well it is (c) achieved in reality. Irrespective a legislature’s obvious jurisdictional competence for legislation, all three criteria must be considered present for its actions to be deemed as lawful.
My conclusion is that (a) necessity cannot with certainty be considered present when based on the legislature's motives – increased efficiency and stability of the financial system. This since the study found no quantitative research to support credit rating’s foretelling value. Hence, there may be other, equally or more efficient credit risk assessment models, less limiting on freedom and democracy if incorporated instead. Furthermore, (b) it is considered doubtful that a reasonable proportionality exists; this in light of the regulations mandatory impact, with possible favouritism of private and profit-driven companies. Finally, (c) the legislature’s motifs cannot be considered achieved in reality through the incorporation of credit ratings. It is even so that the regulation, in part, potentially has reduced the stability of the financial system. Support for this argument is for example the burden that several government linked bodies has placed on credit rating agencies as part of cause of the global financial crisis. Regulation is considered to impede innovation. Hence, incorporating credit rating might actually be a root for the lessened stability by hindering rating methods to catch up with the complexity of some products.
Given that the motifs cannot be considered as achieved, the regulation must be deemed unjustified when weighted against the imposed limitations. Therefor I suggest the following changes to be implemented (individually or preferably simultaneously): The first step is the deregulation of credit rating requirements. Then I suggest three alternatives: (a) Open up for other rating bodies, such as an industry collaboration (effective, but without conflict of interest), (b) market-based models of credit risk (democratic and effective, but still hindering innovation), or (c) increase market transparency by imposing issuers to disclose information or by pushing debt instruments to trade on exchange (reducing over the counter trades).},
  author       = {Widnersson, Filip},
  keyword      = {bankrätt (en. banking law),associationsrätt,avtalsrätt,civilrätt (en. private law),EU-rätt (en. EU law),finansrätt (en. fiscal law),företagsekonomi,förmögenhetsrätt,förvaltningsrätt (en. administrative law),komparativ rätt (en. comparative law),konkurrensrätt (en. civil and criminal procedure),rättsekonomi (en law and economics),rättshistoria (en. legal history),sakrätt,statsrätt},
  language     = {swe},
  note         = {Student Paper},
  title        = {Kreditvärderingsinstitut som auktoritet: En jämförelse av lagstiftarens motiv och verklighetens effekter},
  year         = {2011},
}