Ratings

2021/2022

Academic Year

ENG

Instruction in English

3

ECTS credits

Delivered at:

HSE Banking Institute

Course type:

Elective course

When:

2 year, 1 module

Course Syllabus

Abstract

Credit ratings play a crucial role in the decision-making on investment and manage-ment of financial institutions around the world. This course is focused mostly on na-tional and international rating agencies, rating modeling, and scales and processes. A special attention is paid to methodological differences among rating agencies and quantitative techniques of rating scales, as well as government regulatory practices in banking and finance. In addition, this course provides overviews how credit ratings are assigned and used in financial institutions. Finally, it covers issues of using different types of credit ratings, simultaneously.

Learning Objectives

• The main goal is providing to the students information how to distinguish and analyze the key issues for creation and application of internal and external bank ratings.

Expected Learning Outcomes

• Students will be able to: • highlight the key methodological differences in both international and national rating agen-cies;
• • apply the best practices to assign ratings to different types of economic agents (banks, corpo-rates, government authorities STI);
• • design the relevant and robust system of internal credit ratings for a financial organization;
• • include internal and external credit ratings in the banking control system of financial risks.

Course Contents

• The concept of credit ratings: international and national rating agencies, internal credit rat-ings
• Features of ratings for various types of economic agents.
• The regulatory use of credit ratings
• Analysis of ratings from different rating agencies
• Creating a system of internal credit ratings
• Creating a risk management system using external and internal credit ratings.

Assessment Elements

• home assignments
• class discussions
• final test

Interim Assessment

• 2021/2022 1st module
  0,2 home assignment + 0,2 class discussions + 0,6 final test

Bibliography

Recommended Core Bibliography

• Nye, R. P. (2014). Understanding and Managing the Credit Rating Agencies. Euromoney Books.

Recommended Additional Bibliography

• Booth, A., & de Bruin, B. (2021). Stakes Sensitivity and Credit Rating: A New Challenge for Regulators. Journal of Business Ethics, 169(1), 169–179. https://doi.org/10.1007/s10551-019-04260-2