Brics want to build new credit rating agency

                

The countries of the Brics are looking to create a new credit rating agency in order to end the dominance of three large companies in developed countries.

In an attempt to reduce the costs of loans, according to these countries are too high because of the ratings of S & P Global Ratings, Fitch Ratings and Moody's Investors Service, the group that includes Brazil, Russia, India, China and South Africa aims to create a competing agency with a different tariff structure.

The creation of a credit rating agency that is not dependent on customer recipe that want their debt to be analyzed "is being actively discussed," said Yaduvendra Mathur, chairman and managing director of Eximbank of India, by telephone on 16 of June.

The lender funded by the government is part of the tasks of a team that is studying the feasibility of a new credit rating agency before the next summit of BRIC, scheduled for October.

The biggest obstacle to a risk rating agency of the Brics would convince investors the US and Europe that the notes are assigned without pressure from governments. Criticism of S & P, Fitch and Moody's say they are subject to the companies that assess because their income comes from these customers.

"Healthy competition"

"It will take a while for the credit rating agency of the Brics win such credibility," said Rajrishi Singhal, a senior member of geoeconomic studies of Gateway House.

"It will not happen from day one. Investors will closely watch the way in which they rank and what are the processes that they have undertaken. "

Fitch, based in the United Kingdom, said that the ratings of emerging markets are limited by dependence on external funding, which often gives them less flexibility to deal with the economic and political volatility.

"Any rating agency needs to establish a reputation for independence and management of conflicts of interest," said Daniel Noonan, a spokesman for Fitch in e-mail on 16 June. Fitch "strongly believes in healthy competition," he added.

S & P and Moody's, both based in New York, did not respond to questions sent by e-mail on 16 June.

Developing countries say they receive more stringent reviews than their developed counterparts, which makes them more expensive loans for them because corporate notes are limited to the sovereign level.

The three major credit rating agencies currently control more than 90 percent of the market and have been criticized for giving top marks to high-risk debt that triggered the financial crisis of 2008.

The countries of the BRIC countries, which account for over a quarter of the economic output of the world, have created their own multilateral institution based in Shanghai to finance infrastructure projects.

The New Development Bank, currently chaired by an Indian, "could be a member" of the new credit rating agency, Mathur said.