Free Newsletters - Space - Defense - Environment - Energy - Solar - Nuclear
..
. Earth Science News .




POLITICAL ECONOMY
China-based ratings firm tackles US dominance
by Staff Writers
Beijing (AFP) Oct 24, 2012


The groups behind a new China-based ratings firm said Wednesday they planned to break the dominance of US agencies in assessing state and company debt, a much-criticised part of the financial system.

China's Dagong, Egan-Jones Ratings (EJR) of the United States and RusRating in Russia are to set up a joint venture within six months to be headquartered in Hong Kong, the companies said at a news conference unveiling the partnership.

The three partners are inviting "organisations from every country" to join Universal Credit Rating Group, and Dagong chairman Guan Jianzhong said dozens of companies from more than 20 countries have expressed an interest.

The new group is hoping to break the stranglehold of US-based Fitch, Standard & Poor's and Moody's, which provide vital risk assessments to investors about debt instruments, in the next five years.

"I believe we can do this. Our goal is to form a new system with the synergy of everybody that will balance the existing system," Guan said.

The global financial crisis proved that the current international ratings system has flaws that "jeopardise human prosperity and development" and needs to be reformed, the firms said in a document they dubbed the "Beijing Declaration".

"We live in a very complex world -- there are many competing interests and cultural view points," Richard Hainsworth, president of RusRating, said at the briefing.

"It is not sufficient in such a world for an industry as critical as credit rating to be dominated by just a tiny number of companies."

Inflated ratings issued by "some of the firms in the United States" paid by the issuers played a primary role in causing the 2008-09 financial collapse and the excesses have continued due to a lack of curbs, said EJR President Sean Egan.

"It's obvious that the supervision of the rating agencies to date has fallen far short of the mark," he said.

"It's been rather geocentric and it's time to get on an even playing field and... we hope that will happen in the future with the efforts of today," he added.

Fitch, S&P and Moody's were widely criticised for having given their highest ratings to the debt instruments whose failure sparked the crisis in Western banks in 2008.

The power of Fitch, S&P and Moody's has also drawn the ire of European officials amid the continent's debt crisis, though talk of creating Europe's own rating agency was ruled out amid concerns about costs and objectivity.

Universal Credit Rating Group will be "independent" and composed of private firms "whose responsibilities do not conflict with credit rating, and which do not represent the interest of any particular country or group", the companies said.

The big three US agencies will not be considered for membership "because there is big divergence between the principles and positions we respectively follow", said Guan.

Dagong in August 2011 lowered its main rating for US sovereign debt from A+ to A, with a negative outlook, after Congress passed new legislation to raise Washington's debt ceiling.

Meanwhile, it maintained China's local and foreign currency rating at AA+ and AAA respectively, with a stable outlook. AAA is its highest rating.

S&P, also in August last year, slapped the US with a credit downgrade -- cutting it one notch to AA+ -- citing political deadlock over the deficit.

Egan-Jones Ratings serves institutional investors and was granted status as a "nationally recognised statistical rating organisation" by the US Securities and Exchange Commission in late 2007.

RusRating, based in Moscow, focuses on ratings for the banking sector.

.


Related Links
The Economy






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





POLITICAL ECONOMY
Hong Kong steps in to curb strong currency
Hong Kong (AFP) Oct 21, 2011
The Hong Kong Monetary Authority has sold $603 million worth of Hong Kong dollars in the foreign exchange market in an effort to curb the currency's rise, a report said. The move on Saturday came as the US dollar hit HK$7.75, the lower limit of the trading band in which the greenback is allowed to trade against the local currency, Dow Jones Newswires reported. The Hong Kong dollar is typ ... read more


POLITICAL ECONOMY
Clinton hails Haitian post-quake reconstruction

Top Italy scientists resign in protest at quake ruling

Japan's radiation monitoring unreliable: Greenpeace

Japan saves 64 Chinese seamen from burning freighter

POLITICAL ECONOMY
Zynga stock jumps despite earnings loss

50-year-old computer restored in Britain

Microsoft courts mobile lifestyles with Windows 8

Danes develop eye-control software for phones, tablets

POLITICAL ECONOMY
EU keeps fishing subsidies, attacked by environmentalists

Sweden's only coral reef at risk of dying

A Mississippi River diversion helped build Louisiana wetlands

Leisure boats threaten the Swedish West Coast archipelago

POLITICAL ECONOMY
New understanding of Antarctic's weight-loss

Australia's Antarctic runway melting

Arctic seafloor said littered with plastic

Leonardo DiCaprio urges Antarctic ocean sanctuary

POLITICAL ECONOMY
Panels reject study on GM corn but urge wider probes

Indian farmers cotton on to sustainable farming

Pesticides have knock-on effect for bees: study

Some 500 scientists have created a Top 10 list of plant-damaging fungi

POLITICAL ECONOMY
Hurricane makes direct hit on Jamaican capital

Flooding cut Nigerian oil output by around 20 percent

Jamaica, Cuba issue hurricane warnings

Italian scientists sentenced to jail in quake trial

POLITICAL ECONOMY
Morocco trial of 23 Sahrawis postponed indefinitely

Tuareg killed by uniformed men in central Mali: reports

Climate variability and conflict risk in East Africa measured by Boulder team

Two Guinea-Bissau politicians badly beaten by soldiers

POLITICAL ECONOMY
New images could crack ancient writings

Japanese lake record improves radiocarbon dating

Novel chewing gum formulation helps prevent motion sickness

Discovery of two opposite ways humans voluntarily forget unwanted memories




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement