China's New Credit-Rating System Will Improve Structured Finance Products, Moody's Says
Xu Wei
/SOURCE : yicai
China's New Credit-Rating System Will Improve Structured Finance Products, Moody's Says

(Yicai Global) Oct. 9 -- China's upcoming credit-rating system, expected to be rolled out by next year, will have positive effects on China's structured finance products, according to Moody's.

The National Credit Information Sharing Platform will help identify deadbeats to reduce the risk of loan defaults and increase the recovery rate of bad debts, Moody's Investors Service wrote in a report released today. 

China has sought to crack down on its shadow banking sector for years, formulating preventive policies and blacklisting individuals to strip them of their rights to splurge or travel. Non-traditional investment strategies, such as structured finance products, have been part of the problem that risks the financial health of both lenders and borrowers.

The new system will share data that was earlier restricted to individual government agencies in order to allow lenders to access borrowers' credit reports more easily, said Chen Yangyang, an analyst at the New York-headquartered credit ratings firm.

Editor: Emmi Laine 

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Keywords: Structured Finance Products , National Credit Information Sharing Platform , Credit-Rating