Ratings are not credit - and a new agency won't change that
Investors from the developing world should base their risk assessment on their own research and the interest rates in the open market
You can be pretty sure someone is clueless about finance if they start blaming the 2008 crisis on the Big Three credit rating agencies.
Sure, Standard & Poor's, Moody's Investors Service and Fitch Ratings badly blotted their collective copy book by helping Wall Street banks repackage toxic subprime debts as investible securities with topnotch credit ratings.
But the sins of the rating agencies pale into insignificance beside the wrongs committed by central banks, which kept interest rates far too low, governments, which encouraged reckless borrowing, and bank bosses, who threw prudence out of the window and leveraged up in pursuit of profit.
In any case, anyone who paid any attention knew - or should have known - that the agencies' credit ratings were barely worth the paper they were printed on.
Asian investors learned that in 1997, when the agencies signally failed to warn of the rash of defaults that spread across the region following the devaluation of the Thai baht.
The economic crisis was … the beginning of the end of Western privilege
And the conflict of interest that renders agency ratings largely worthless should have become clear to the rest of the world in the run-up to the 2008 crisis. In 2007, just seven US corporations carried the coveted AAA top credit rating. Yet in the same year, the agencies managed to award more than 1,000 AAA ratings to complex structured financial products.