Generally accepted rating principles: a primer

  • Bank internal ratings of corporate clients are intended to quantify the expected likelihood of future borrower defaults. This paper develops a comprehensive framework for evaluating the quality of standard rating systems. We suggest a number of principles that ought to be met by 'good rating practice'. These 'generally accepted rating principles' are potentially relevant for the improvement of existing rating systems. They are also relevant for the development of certification standards for internal rating systems, as currently discussed in a consultative paper issued by the Bank for International Settlement in Basle, entitled 'A new capital adequacy framework'. We would very much appreciate any comments by readers that help to develop these rating standards further. Simply send us an E-mail, or give us a call.

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Author:Jan Pieter KrahnenORCiDGND, Martin Weber
Parent Title (German):Institut für Kapitalmarktforschung (Frankfurt am Main): CFS working paper series ; No. 2000,02
Series (Serial Number):CFS working paper series (2000, 02)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Year of Completion:2000
Year of first Publication:2000
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/06/13
Tag:banking supervision; capital adequacy; corporate rating; credit risk management
GND Keyword:Kreditwürdigkeit; Standardisierung; Zertifizierung; Bankenaufsicht
Issue:Version: 14 Febr.2000
Page Number:18
First Page:2
Last Page:19
First version: November 2, 1999 ; This version: February 14, 2000 ;Forthcoming: Journal of Banking and Finance
Source:CFS working paper ; 2000,02
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht