The Relationship between Credit Ratings and Bank’s Financial Stability

During the last 10 years 2010-2019 more than 500 banks have been revoked a license due to loss of assets and illegal actions. Needless to say that it is extremely important to evaluate correctly the risk of default. The main goal of the graduate work is to define financial indicators affecting the risk of banks’ default including credit ratings and estimate some approaches for predicting the event time. Here are two types of analysis: survival analysis based on the Cox Hazard of European Central Bank and logit-model which is widely used by Russian financial institutes. The expected results of the research is the significant difference in predictive power of SAS- and logit models and also the evidence of the relationship between the financial performance of the bank and the credit ratings of international and Russian rating agencies.