Extract: Financial distress is often caused by default or credit-rating changes of the counterparty and the resulting credit risk. By measuring the credit risk technology, we can identify the default rate of the counterparty in the event of default and the impact it may have on company losses. In recent years, some publicly listed companies in Shanghai have announced restructuring, default, or delisting without warning. These financial distress events clearly challenged both the authority capacity of the Commissioner and the capacity of investors to respond in the face of confusing information and the lack of ability to measure risk, resulting in high social costs. Therefore, it is important to raise investors' credit risk awareness prior to establishing a financial distress early warning system, so advanced firms may change a deal, or if there is an indication of financial distress, investors may reduce a preventable loss. Establishment of an appropriate financial distress early warning system is the most urgent of issues.
|Title of host publication||Emerging markets|
|Subtitle of host publication||Performance, analysis and innovation|
|Editors||G. N. Gregoriou|
|Place of Publication||Boca Raton, USA|
|Publisher||Taylor & Francis|
|Number of pages||22|
|Publication status||Published - 2010|