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Brazil, India, SA part of new global ratings agency
November 12, 2013, 5:29 pm

ARC is equipped with a European Securities Markets Authority (ESMA) licence and would be challenging the dominance of the world’s three big credit ratings agencies, Moody’s, Fitch and S&P, which together account for a 90 per cent share of the ratings market [Getty Images]

ARC is equipped with a European Securities Markets Authority (ESMA) licence and would be challenging the dominance of the world’s three big credit ratings agencies, Moody’s, Fitch and S&P, which together account for a 90 per cent share of the ratings market [Getty Images]

Five international rating agencies are forming a joint venture to create a new global ratings agency, ARC Rating, that would cater to the “new multi-polar world”.

A statement from the agency said they would formally launch later this year in December or January 2014 with its headquarters in London.

“Working together (the agencies), will provide ratings answers to the new multi-polar world economy in direct competition with US-centric agencies,” ARC said in its website.

Three of the five companies are from the BRICS bloc- Brazil’s SR Rating, CARE Rating of India and GCR of South Africa. They are tying up with CPR of Portugal and MARC of Malaysia.

ARC is equipped with a European Securities Markets Authority (ESMA) licence and would be challenging the dominance of the world’s three big credit ratings agencies, Moody’s, Fitch and S&P, which together account for a 90 per cent share of the ratings market.

Each of the five partners, with considerable market shares in their domestic markets, would hold 20 per cent stake in ARC Ratings.

“An automatic centre of gravity is replaced by a global cooperative approach to credit ratings,” said the ARC statement.

ARC, however, is not the first attempt to break the monopoly of the ratings market.

Rating agencies from China, Russia and the United States officially launched a new credit rating company in Hong Kong in June this year to challenge the current industry leaders.

“We have looked at their results over a period of time. The Big-3 each appear to us to use a single standard to measure all companies: they view all economies as if they were the US economy and all business environments as if they are in New York. This is patently untrue,” Richard Hainsworth, the President of RusRating had told The BRICS Post.

 

 With inputs from Agencies

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