Wednesday, 20 March 2019

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New rating agency will challenge the big three

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A new player in the market risk rating agencies has appeared. Today opened the Universal Credit Rating Group, established by the Russian agency RusRating, the Chinese company Dagong and the American Egan-Jones. The long-term objective of the new entity is neither more nor less than to throw challenges to major rating agencies. The group's headquarters is located in Hong Kong and is headed by the CEO of RusRating, Richard Hainsworth. This defined an ambitious task: to be one of the key players in the market, cornering to the "three pillars": Standard&Poor's, Moody's and Fitch. Since the beginning of the great global financial crisis, the great trio is accompanied by major scandals. The giants are accused on a permanent basis to award high rates which, in fact, prove to be toxic assets. The market rating agencies really need "fresh blood" because the new project, though not of entry, he will find to his clientele, says the head of the Analytical Department of Forex Club Group, Andrei Dirguin: -The emergence of a new player in the market is a positive sign. It will slightly increase competition. Hopefully eventually become a decent player in the international arena. The agency, no doubt, will face some difficulties to compete with Standard&Poor's, Moody's and Fitch, have to earn their reputation. To do this, it takes time, but at some point you have to start. For now, we do not see a better alternative to large agencies. Even in the European Community, dissatisfied with this great trio has deepened their qualifications debt problems in the region, it did not manage to create an independent agency. For now, everything lies in the financing. The concept of independent actor expects its services will not be funded by the issuers of valuable papers, which are awarded to those ratings, but buyers of those assets. But the latter, for now, do not rush to invest in the new project. If this problem does not become resolved, then we can talk about the independence of the agency, according to the director of the Russian Analytical Department of Nomos-Bank, Kiril Tremásov: -There is some conflict of interest. It happens that the services of rating agencies and the auditor pays the issuer and not the consumer of the information. Chances are that in such a situation, the auditor and the agency will not be of the side of the investor, but on the side of the one who pays the agency. It is an old conflict that who knows how it will be overcome in the future. So, for the moment, the EU intensifies the rules for these agencies. Not long ago were prescribed make their management more transparent. Furthermore, it requires to banking and other financial institutions rely more on their own risk assessments of one  or another type of investment and not depend solely on the deductions of the risk rating agencies. [caption id="" align="alignnone" width="509"]A trader looks quotes Photo: EPA: A trader looks quotes[/caption] Source: spanish.ruvr.ru
Erick Gálvez
Author: Erick GálvezWebsite: http://www.asdforex..comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
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