An international indepen- dent credit rating agency was established in Beijing on Oct. 24, which aims for a system of comparable, global credit ratings.
The new agency, named Universal Credit Rating Group, was sponsored by three of the world’s independent credit rating agencies from China, USA and Russia, namely Dagong Global Credit Rating, EganJones Ratings, RusRating respectively.
“The global credit crisis has highlighted the importance of credit ratings on human society, and has demonstrated that flaws in the current international credit rating system jeopardize human prosperity and
development. The current system no longer meets the credit rating needs of the world,” said the Beijing Declaration signed by the three agencies.
Human civilization is in an economic era dominated by credit and debt financing. Prosperity and sustainable development are indissolubly linked with impartial credit ratings, the Declaration explained.
The declaration calls for establishing a new type of international credit rating system which follows the inherent requirements of credit rating and which is aligned to the common interests of human society.
“We live in a global economy that is dominated by credit relationships and debt financing. It is vital to the prosperity of all nations that credit ratings provide comparable information about borrowers in all countries,” said Guan Jianzhong, president of Dagong Global Credit Rating.
“Overly optimistic credit ratings have led to an economic crisis, almost to a catastrophe that was only avoided thanks to unprecedented central bank interventions. The credit rating system urgently needs to be reformed,” said Sean Egan, president of Egan-Jones Ratings.
“Investors around the world are recognizing that their best interests are served when there is a variety of views about the strengths and weaknesses of borrowers. Whilst listening to analysts from different countries and cultures may lead to a broader understanding, there is also a need for global standards and comparable credit ratings,” said Richard Hainsworth, president of RusRating, adding “the vital task is to obtain a common global vision from diverse national insights.”
According to the Declaration, the Universal Credit Rating Group is a multilateral independent credit rating agency comprised of private organizations whose responsibilities do not conflict with credit rating, and which do not represent the interest of any particular country or group.
The mission of the group is “to promote the reform of the international credit rating system and construct a new international credit rating system which reflects the laws governing the development of our credit-based economy and stands for the common interests of the mankind” and “to develop new international credit rating criteria, establish an independent international supervision system for credit ratings, disseminate impartial rating information around the world.”
The new agency is targeted to establish a new international credit rating system and operational mechanism within five years, said the Declaration.
