11:00 - 12:30
Frankel Leó út 30-34.
CEU Department of Economics in collaborations with CEU Business School presenting
Professor Michael C S Wong on:
Analyzing Corporate Credit Risk: The Myths in China
With the perspectives of credit rating analysts, this paper identifies seven myths on analyzing corporate credit risk in China, and discusses how they differ from truths with economic data, market data and surveys of literature. What the truths are: (i) China’s banking sector did have a low non-performing loan ratio; (ii) China’s corporate bond market was extremely safe; (iii) many state-owned enterprises in China were bailed out by the government before their bankruptcy; (iv) financially poor exchange-listed companies did not go bankrupt; (v) many listed corporate bonds were close to junk-grade level in the past several years; (vi) domestic credit ratings in China do differentiate credit risk but do not tell the truth of their risk; and (vii) financials are not key determinants of credit risk in China. The statistics in the paper provide clues to auditors and analysts to review credit value adjustments on China-related assets, including account receivables, loans, lease receivables and bonds.
On the Distinguished Lecturer
Dr. Michael C S Wong is Associate Professor of Finance at City University of Hong Kong, and an expert in Asia on bank risk management under the Basel II/III framework. He architected the first Basel-standard internal ratings-based (IRB) system in Hong Kong, and advised many Asian banks on building IRB models. After the collapse of Lehman Brothers in 2008, he re-engineered wealth management due diligence models for some banks in Hong Kong, including investor profiling models and investment product risk rating models. These models are currently implemented by more than 20 financial institutions. Dr. Wong has reviewed risk control and stress testing models for banking institutions in Asia, submitted independent risk assessment reports to company boards and regulators, and served as an expert witness to laws firms and courts on litigations involving complex financial transactions. He has served as a founding member of GARP’s FRM Committee (1998-2002), an examiner of both HKSI and HKIB, a member of the Advisory Board of China Credit Ratings in Beijing, and the Chairman of CTRISKS Rating in Hong Kong. He graduated from the Chinese University of Hong Kong, the University of Essex and the University of Cambridge, and has published more than 40 academic journal articles, 10 book chapters and 5 professional books. His articles have appeared in leading journals including MIS Quarterly, the Journal of the Operational Research Society, the Journal of Futures Markets, the Journal of Forecasting, Omega, and Emerging Markets Finance and Trade.