Ratings

2024/2025

Academic Year

ENG

Instruction in English

3

ECTS credits

Delivered at:

HSE Banking Institute

Course type:

Elective course

When:

2 year, 2 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 assignment
  Home assignment has the submission deadline. This element of control cannot be retaken.
• Class discussions
  This element of control cannot be retaken.
• Final Exam
  Mid-term exam result is the blocking exam (that is blocking element of assessment). In case the grade for the blocking element of assessment is unsatisfactory, the general mid-term grade is to be equal to the blocking element of assessment grade until the moment when student gets the satisfactory grade for the blocking element of assessment. As soon as the student gets the satis-factory grade for the blocking element of assessment (immediately or at the retake), the mid-term grade for the discipline is to be counted based on the received positive grade

Interim Assessment

• 2024/2025 2nd module
  0.2 * Class discussions + 0.6 * Final Exam + 0.2 * Home assignment

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

Authors

• ELIZAROVA IRINA NIKOLAEVNA
• Solodkov Vasily Mikhaylovich
• ODINTSOVA ULYANA ALEKSANDROVNA