Ratings agencies from China, Russia and US to take on Big Three
The objective is to have an international credit rating system and criteria over the next five years, say the main movers of the Hong Kong project
Three credit rating agencies, from China, Russia and the United States, aim to launch a multilateral ratings organisation to challenge the dominance of the Big Three: Standard & Poor's, Moody's and Fitch Ratings.
They plan to set up the new company in Hong Kong within six months, along with rating agencies from other countries.
Dagong Global Credit Rating, a Beijing-based agency founded in 1994, is teaming up with Egan-Jones Ratings of Pennsylvania and RusRating of Moscow to create a "multilateral, independent, international" agency called the Universal Credit Rating Group.
Its goal is to establish an international credit rating supervision system and unified rating criteria over the next five years, the three agencies' heads said in Beijing yesterday. Dagong president Guan Jianzhong said more than 20 agencies have expressed interest in joining the group.
RusRating president Richard Hainsworth said "it's not sufficient" for the industry "to be dominated by just a tiny number of companies or the understanding of analysts sitting in one town, in one city", given the complex nature of the world and competing interests among countries.
"Overly optimistic credit ratings have led to an economic crisis," said Sean Egan, co-founder of Egan-Jones. His agency and Dagong were among the first agencies to downgrade the sovereign debt of the US; eventually, S&P followed suit.