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Municipal Rating – Is It Necessary?

Author

Listed:
  • Carmen Maria CONSTANTINESCU

    (Bucharest University of Economic Studies, Romania)

  • Paul TANASESCU

    (Bucharest University of Economic Studies, Romania)

Abstract

This paper work puts in discussion the rating for municipal bonds, covering relevant aspects seeing the opportunity of municipal credit risk classification, in a market with information transparency problems. Conditioned by facts as the credit size, the level of remuneration and especially by the financial situation of the issuer, rating satisfy the need for synthesized information of all investors, but implies big accountability for local government. If favorable rating is a major signal of credibility in the financial market, bringing a low-cost funding of local investment projects but also notoriety for issuer, a bad classification level brings opposite. In Romania there is no specialized municipal rating system, although the specific market is one of the most developed in Southeastern Europe.

Suggested Citation

  • Carmen Maria CONSTANTINESCU & Paul TANASESCU, 2014. "Municipal Rating – Is It Necessary?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(Special), pages 57-63, June.
    • Handle: RePEc:agr:journl:v:xxi:y:2014:i:special:p:57-63
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