Rolo of Credit Rating

The credit rating business constitutes an integral part of the capital market infrastructure, serving useful functions for investors, issuers and financial markets. First, it helps investors minimize investment risks and extend investment periods and also serves as a guideline for reasonable asset management. For issuers, it provides diverse channels to access the capital market so that the issuers can reduce financing costs and balance the maturities of their debt securities. Lastly, financial markets also benefit from the credit rating business since it enhances market efficiency by cutting financial transaction costs.