The Role of Credit Rating Agencies in Asia's Emerging Bond Markets

5 May 2005 (10:00 a.m. - 12:00 noon)

An efficient credit rating system is necessary to support the development of an Asian bond market-starting with national bond markets.

Most Asian countries could develop robust domestic bond markets if they had credible credit rating agencies to help investors make decisions based on comparisons of investment worth. A credit rating is essential if bonds are to be traded actively in the domestic market. Credit rating is doubly essential if the bonds are to be traded across borders beyond the national territory, which the ASEAN+3 Asian Bond Markets Initiative (ABMI) envisions.

To support the ASEAN+3 ABMI, it is useful to have a framework to help bond market participants assess and understand the role of credit rating agencies and, in parallel, how other institutions enhance these agencies' effectiveness.

This seminar will address the following:

• What kind of credit rating infrastructure do domestic financial markets need to promote and develop the Asian bond market? What is the role of other institutions that impact on the effectiveness of credit rating agencies (e.g., regulatory authorities, bond exchange, and financial intermediaries)?



• How did domestic credit rating agencies in Japan and the Republic of Korea, Southeast Asia, and India help develop the bond markets? What lessons can be drawn from their experiences in addressing issues such as (i) making credit ratings comparable, (ii) confidentiality requirements versus adequate disclosure, (iii) establishing and enforcing high ethical standards, (iv) ratees supplying inadequate information, (v) adequate monitoring, (vi) nature and extent of regulation, (vii) multiple regulations of multiple agencies, and (viii) relating domestic and international rating scales?

Contact Us

For further information, contact Mr. Srinivasa Madhur, tel: (63-2) 632-6239, email: smadhur@adb.org