The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine
This paper presents a comprehensive system of 38 indicators, which allows identification of possible endogenous sources and evaluation of the potential of conflicts of interest arising both at the corporate (in models of ownership, business and financial activities, corporate governance and organiza...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2017-07-01
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| Series: | Problems and Perspectives in Management |
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| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/8944/PPM_2017_02cont_Rebryk.pdf |
| _version_ | 1823997504560037888 |
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| author | Mykhailo Rebryk Yuliia Rebryk Sergii Sokol Yevhenii Kozmenko |
| author_facet | Mykhailo Rebryk Yuliia Rebryk Sergii Sokol Yevhenii Kozmenko |
| author_sort | Mykhailo Rebryk |
| collection | DOAJ |
| description | This paper presents a comprehensive system of 38 indicators, which allows identification of possible endogenous sources and evaluation of the potential of conflicts of interest arising both at the corporate (in models of ownership, business and financial activities, corporate governance and organizational structures) and operational (analyst) levels of credit rating agencies (CRAs). Testing of proposed system of indicators was carried out based on the content analysis of the public information on the activities of five authorized credit rating agencies of Ukraine. It is determined that at the beginning of 2017 the most sensitive to the risk of conflicts of interest were “Standard Rating” (74% of threat signals of the total number of indicators), “Expert Rating” (57%) and “Rurik” (37%). The highest potential of conflicts’ of interest escalation was identified in the models of financial activities (80% of threat signals of the total number of indicators of that group) and models of ownership of Ukrainian CRAs (63%). The estimations of the risk level are proposed to be regarded mainly as signals of the potentially high sensitivity of the particular CRA to the risk of conflicts’ of interest escalation. Such signals, in particular, can be used by the regulators for carrying out remote monitoring activities of CRAs, for adopting supervisory and regulatory decisions. In turn, managers and owners of rating agencies can conduct a more detailed analysis of the detected potential sources of conflict of interest with the aim of identification, localization, and elimination of shortcomings in the system of conflict of interest management. |
| first_indexed | 2024-12-18T17:16:16Z |
| format | Article |
| id | doaj.art-b960be0ac2d14c5c8a56d2d846edc7cd |
| institution | Directory Open Access Journal |
| issn | 1727-7051 1810-5467 |
| language | English |
| last_indexed | 2024-12-18T17:16:16Z |
| publishDate | 2017-07-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Problems and Perspectives in Management |
| spelling | doaj.art-b960be0ac2d14c5c8a56d2d846edc7cd2022-12-21T21:00:01ZengLLC "CPC "Business Perspectives"Problems and Perspectives in Management1727-70511810-54672017-07-0115222223310.21511/ppm.15(2-1).2017.068944The potential of conflicts of interest arising in the activities of credit rating agencies in UkraineMykhailo Rebryk0Yuliia Rebryk1Sergii Sokol2Yevhenii Kozmenko3Ph.D. (Economics), Senior Analyst (Treasury) with Raiffeisen Bank AvalPh.D. in Economics, Associate professor of the Chair of Finance and Credit, Cherkasy Institute of the SHEI “University of Banking”Ph.D. in Economics, Associate Professor, Department of Finance and Credit, Kharkiv National University of Construction and ArchitectureMgr., Sumy State UniversityThis paper presents a comprehensive system of 38 indicators, which allows identification of possible endogenous sources and evaluation of the potential of conflicts of interest arising both at the corporate (in models of ownership, business and financial activities, corporate governance and organizational structures) and operational (analyst) levels of credit rating agencies (CRAs). Testing of proposed system of indicators was carried out based on the content analysis of the public information on the activities of five authorized credit rating agencies of Ukraine. It is determined that at the beginning of 2017 the most sensitive to the risk of conflicts of interest were “Standard Rating” (74% of threat signals of the total number of indicators), “Expert Rating” (57%) and “Rurik” (37%). The highest potential of conflicts’ of interest escalation was identified in the models of financial activities (80% of threat signals of the total number of indicators of that group) and models of ownership of Ukrainian CRAs (63%). The estimations of the risk level are proposed to be regarded mainly as signals of the potentially high sensitivity of the particular CRA to the risk of conflicts’ of interest escalation. Such signals, in particular, can be used by the regulators for carrying out remote monitoring activities of CRAs, for adopting supervisory and regulatory decisions. In turn, managers and owners of rating agencies can conduct a more detailed analysis of the detected potential sources of conflict of interest with the aim of identification, localization, and elimination of shortcomings in the system of conflict of interest management.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/8944/PPM_2017_02cont_Rebryk.pdfCRACRA independencecredit rating agenciesrisk of conflicts of interestsystem of indicatorstransparency |
| spellingShingle | Mykhailo Rebryk Yuliia Rebryk Sergii Sokol Yevhenii Kozmenko The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine Problems and Perspectives in Management CRA CRA independence credit rating agencies risk of conflicts of interest system of indicators transparency |
| title | The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine |
| title_full | The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine |
| title_fullStr | The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine |
| title_full_unstemmed | The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine |
| title_short | The potential of conflicts of interest arising in the activities of credit rating agencies in Ukraine |
| title_sort | potential of conflicts of interest arising in the activities of credit rating agencies in ukraine |
| topic | CRA CRA independence credit rating agencies risk of conflicts of interest system of indicators transparency |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/8944/PPM_2017_02cont_Rebryk.pdf |
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