Hong Kong-based credit rating agency launched to challenge ‘Big Three’
Thursday, 27 June 2013 01:48
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Hong Kong (CNN): A new credit rating agency backed by Chinese, Russian and American firms has launched recently in Hong Kong, with a mission to displace the “Big Three” Western firms at the heart of the international ratings system.
The joint venture, the Universal Credit Rating Group (UCRG), says it intends to reform the current international credit rating regime, creating the initial framework for a new system by 2020, with the ability to provide credit risk information on all the world’s economies by 2025.
Beijing-based Dagong Global Credit Rating, Russia’s RusRating and U.S.-based agency Egan-Jones Ratings are behind the project, which they consider part of a necessary overhaul of a system whose failings contributed to the 2008 global financial crisis.
Currently, ratings issued by the Big Three, Standard & Poor’s, Moody’s and Fitch, to large-scale borrowers, such as governments and corporations, play a central role in determining how investors allocate billions of dollars. Their ratings indicate to buyers of debt how likely they are to be paid back.
