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New global credit rating agency

By Wei Tian in Shanghai | China Daily | Updated: 2013-09-16 08:16

New global credit rating agency

Experts see Universal Credit Rating Group, a consortium that includes China's biggest ratings agency Dagong Global Credit Rating Co Ltd, as growing evidence of a determination to boost Chinese influence on the global credit ratings system. Photos Provided to China Daily

Consortium with 'big three' in its sights will boost competition in the sector

The opening of a new global credit rating agency, one of whose co-founders is Chinese, has been welcomed by a former senior World Bank vice-president, who says it will be an "invaluable asset" that can take on companies which now dominate the global industry.

Experts also see the new agency, Universal Credit Rating Group, as growing evidence of a determination to boost Chinese influence on the global credit ratings system on the back of its growing economic and financial power.

"Any development that can elicit more competition and generate a greater number of actors in the rating agency field is welcome," says the former senior World Bank vice-president, Ana Palacio, who is also a former foreign minister of Spain.

UCRG, a consortium of China's biggest ratings agency, Dagong Global Credit Rating Co Ltd, Egan-Jones of the United States and RusRating of Russia, began operations in Hong Kong in late June.

Moody's Investors Service, Standard & Poor's Ratings Services and Fitch Ratings control 95 percent of the global ratings market, but some of their performances during the financial crisis have eroded trust in the way they work and raised questions about their potential to undermine state sovereignty.

UCRG's ability to attract widespread business hinges on whether it can conform to the "non-sovereign principle" and demonstrate that it is "universal" as it claims, and not just the joint product of its three co-founders, Palacio says.

"As a European, I consider it imperative that the continental point of view be represented in this universal platform as well."

UCRG's chairman is Guan Jianzhong, chairman of Dagong, and its chief executive is Richard Hainsworth, the founder of RusRating.

A statement issued at a news conference in Beijing last October announcing the establishment of UCRG says its mission is to "construct a new credit ratings system within five years".

Hainsworth says then: "It will be a multilateral, independent, and international credit ratings agency comprised of private organizations whose responsibilities do not conflict with the ratings and do not represent the interest of any particular country or group."

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