Acta academica karviniensia 2013, 13(2):116-124 | DOI: 10.25142/aak.2013.031

INTERNAL RATING SYSTEM OF A NON-BANKING INSTITUTION - AN EVALUATION AFTER THREE YEARS

Martin Svítil

Masarykova univerzita, Ekonomicko-správní fakulta, Lipová 507/41a, 602 00 Brno, Email:martin.svitil@seznam.cz

This article contains the result of a research, monitoring the rating system of one (non-bank) financial institution in years 2007 - 2009. The essence of the research is a probability of default based on the rating system compared with real figures of defaults. The result of the research illustrates, that the main problem of the rating system is its delay, especially at clients with double-entry bookkeeping. The rating of the most clients is based on two or more years old financial reports (statements). The elimination of this problem would be difficult, where one of the possible solutions is making ratings based on preliminary statements.

Keywords: Basel II, rating, probability of default, rating delay

JEL classification: G21

Received: February 7, 2011; Accepted: April 16, 2013; Published: June 30, 2013  Show citation