A Critical Analysis of the Recent Russian Regulation on Credit Rating Agencies

Abstract

Since the recent financial crisis of 2008, credit rating agencies (CRAs) have been under scrutiny for their role in the proliferation of structured finance products. Whether their methodological tools and evaluations have been up to standard is in question. As is well-known, CRAs are multinational enterprises that operate on a global basis. Their evaluations may well hinder the stability of international markets. As a legal response to the many concerns raised about CRAs, different approaches have been applied to the use of credit ratings in the US and EU with many similarities. In this international scenario, the government of the Russian Federation also recently introduced a new regulation on CRAs, drafted on the lines of the European regulation. This short paper is targeted to inform the reader of certain aspects of the newly approved regulation in Russia and to examine – in a comparative way – whether the introduced rules match the expectations behind the initiatives of the Russian government.