Search results

The purpose of this paper is to investigate the role and responsibility of credit rating agencies in promoting soundness and integrity, especially in the course of their business activities.

The paper describes, and uses, the framework for the activities of credit rating agencies introduced by the International Organization of Securities Commissions (IOSCO), in order to give effect to this investigation.

Credit rating agencies have implemented the provisions of the Code of Conduct Fundamentals for Credit Rating Agencies of the IOSCO on the quality and integrity of the rating process, to the extent of the resources available to them.

The main source of data is the information collected by the IOSCO from nine credit rating agencies, including the main three, on the quality and integrity of their rating processes. The absence of triangulation of research methods limits the robustness of the findings.

The paper addresses a specific aspect of the credit ratings story since the financial crisis on which there is currently little in the literature. It also focuses upon the actions of credit rating agencies, rather than on how these organisations are, or should be, regulated.

Both consumer and corporate credit ratings agencies played a major role in the US subprime mortgage crisis. Equifax, Experian, and TransUnion deployed a formalized scoring system to assess individuals in mortgage origination, mortgage pools then were assessed for securitization by Moody's, S&P, and Fitch relying on expert judgment aided by formal models. What can we learn about the limits of formalization from the crisis? We discuss five problems responsible for the rating failures – reactivity, endogeneity, learning, correlated outcomes, and conflict of interest – and compare the way consumer and corporate rating agencies tackled these difficulties. We conclude with some policy lessons.

Following the subprime crisis and the detrimental role played by remuneration practices, an important reform concerned bank remuneration committees, especially in “significant financial institutions”. In light of this consideration, this paper aims to investigate the scope and format of this renewal in order to verify whether and how those bodies are conforming to the new regulatory framework while improving their efficiency and functionality.

The study was carried out on 30 top European banks through the elaboration of a qualitative analysis model that takes into account both the procedural and the compositional aspects of remuneration committees. The model was used as a benchmark for assessing the effectiveness of the remuneration committees operating within a sample. This assessment was carried out according to the content analysis approach.

The results show a high diffusion of these bodies within the banks and a gradual expansion, during the time under investigation (three years 2008-2010), of the information provided by them on their tasks and decision-making. In the same time, the study highlights some important criticalities concerning both the composition of the banks' remuneration committees, how they carry out their functions, and the level of disclosure addressed to shareholders and the market in order to formalize the results of their work.

The added value of the analysis is related to the implementation of an “effectiveness remuneration committee rating” applied to a sample of top European banks during the financial crisis.

The purpose of this paper is to examine the emerging Chinese credit rating agencies (CRAs), and their development, regulatory regime and challenges. The Chinese financial system has made many improvements; in particular, the regulatory regime has reached a more effective level. However, it should be admitted that some aspects still require further development. Compared with other developed markets, the Chinese credit rating industry is still young. Under these circumstances, questions are raised about the performance of the CRAs in China. Whether the legal framework is effective enough? A further point, in terms of the development, is what are the major obstacles lying ahead for the Chinese CRAs?

This paper will concentrate on the study of Chinese CRAs. Starting with a brief introduction and analysis on the Chinese CRAs, it will further examine the rating methodologies of the Chinese CRAs. Following this, the regulatory regimes will be analyzed in detail, from the perspectives of the securities, banking and insurance market. Moreover, the paper will identify the key problems under the current regulatory regime. Last but not least, a conclusion and some future suggestions for the development of the regulatory regime will also be made based on the earlier observations and study.

The current development stage and future reform requirement of the Chinese credit rating industry.

Provide a full dimension and in depth analysis on the Chinese credit rating industry.

A BODY known as the Local Government Personnel and Management Services Group has been moved to issue a short paper commenting on the Bains Report issued by the Bains Committee to which the Group submitted evidence.

To develop and validate an instrument to measure the problems associated with performance appraisal.

The implementation was in two phases. Phase 1 involved the development and validation of an instrument to measure the problems with performance appraisal. Phase 2 involved the exploration and confirm the construct measurement. Data used in Phase 1 were collected from interviews with administrators and employees in the automotive parts manufacturing industry and five experts. In Phase 2, data were derived from questionnaires sent to 320 employees of automotive parts manufacturers in the Eastern Region of Thailand.

Problems concerning performance appraisals were classified into two components as problems with the appraisal process and problems with the appraising person. The concepts, theories and interview results that were used to develop the instrument and assess problems with performance appraisals were consistent with the empirical evidence.

The developed instrument may be used to measure problem levels of performance appraisals in organizations with high accuracy and reliability. Findings may be used as guidelines for management to effectively reduce problems with performance appraisals. The instrument may also be used for research measurement of organizational problems concerning performance appraisal.

Fairness, transparency and testability are aspects of effective management. Ignorance of problems in performance appraisals may have negative effects on a conducive working atmosphere and behaviors at the personal, group and organizational levels. Therefore, the findings of this study have social implications for the capability to examine fairness in employees' performance appraisals.

The instrument for measuring problems with performance appraisal was developed based on the combination of concepts, theories and interview and questionnaire data. This instrument facilitates human resource officers, managers and organizations in measuring the levels of problems with performance appraisals.

Explores employee experiences of HRM within a division of a non‐unionised Korean owned MNC, which comprised a mix of greenfield site and brownfield site factories. Explores employee perceptions of the effectiveness of communication and consultation within the company. Incorporates a consideration of the role that gossip, rumour and the grapevine play when formal systems for communication and consultation are not trusted. Examines the conditions that led to a disjunction between the existence of “sophisticated HRM” systems for communication and consultation and positive outcomes in the workplace. Concludes that management action and behaviour were more important in determining HR outcomes than “typical” greenfield site variables such as a brand new factory or a “new” employment philosophy.

To test for a relationship between corporate reputation and financial performance, using Australian data.

Econometric modelling.

No causal relationship between corporate reputation and financial performance (in either direction) was found. This is contrary to some findings in other countries. Reputation may not have a significant impact on performance in Australia. There may be weaknesses in the existing measure of reputation, or the finding may be due to unobserved variability in the intervening variable of managerial exploitation of the reputation.

The findings may be specific to Australia. In Australia, the linkage between reputation and performance may be too small to be significant in the available sample. It is argued that in corporate practice the link between reputation and performance proceeds via strategy and competitive advantage. Having a reputation resource is not enough; it needs to be managed well and exploited if it is to yield financial results. More work is needed to establish reliable measures of reputation.

It is the first known study to investigate the link on Australian data. The discussion of the findings raises issues for the measurement and management of reputation.

Summarize and review the key developments during the first three-quarters of 2021 relating to transition of the London InterBank Offered Rate (LIBOR) to alternative risk-free rates, in accordance with the guidance of global regulators and market participants.

Outlines and explains four key events to date during 2021 that are instrumental to the success of LIBOR transition, including the ISDA 2020 IBOR Protocol and Supplement, the 5 March 2021 announcements by ICE Benchmark Administration and the Financial Conduct Authority, the transition of interdealer swap conventions from LIBOR to SOFR, and the ARRC endorsement of the CME Group SOFR term rate.

The global adherence to the ISDA Protocol and Supplement, the successful launch of “SOFR First” and other “RFR First” swaps convention transitions, and the ARRC’s endorsement of CME’s SOFR term rate have given the market the clarity and tools that it needs to complete the transition away from LIBOR by the deadlines fixed by the 5 March 2021 benchmark transition event.

It now is clear that market participants globally have the resources to, and must, move to adopt alternative reference rates and related operational systems and other infrastructure to cease origination of new LIBOR-linked contracts after 31 December 2021. The ARRC’s endorsement of the SOFR term rate for business loans and related derivatives and securitizations is a critical positive development for the structured finance market.

Expert analysis and guidance from experienced finance lawyers.

This paper aims to investigate the impact of sovereign rating and corporate governance on performance of Latin American companies between 2004 and 2018.

This study performed a multilevel regression with fixed and random coefficients for 823 companies and verified the impacts of country, firm and time levels on the performance variation. The study alternated return on assets and Tobin’ Q as dependent variables and measured governance using the following variables: board size, chief executive officer/chairman duality, CEO/board member duality, dummy for the chairman as a former CEO, audit committee, independence and expertise of the audit committee.

Latin American companies performed better when their respective countries have a better sovereign rating and when they adopt better board of directors and audit committee mechanisms. Sovereign rating assumes distinct roles depending on the presence or absence of governance variables. Rating and governance may be substitute mechanisms to protect investors.

To the best of the authors’ knowledge, this paper is the first to investigate the impacts of sovereign rating on firm performance in the Latin American scenario. The use of governance metrics – for example, the audit committee expertise and the dummy for chairman as a former CEO – is innovative in Latin American studies.