After the New Development Bank (NDB), formerly referred to as the BRICS Development Bank, the five-member bloc of emerging nations is considering setting up an emerging market credit ratings firm in its efforts to challenge western hegemony in the world of credit ratings. The big three credit ratings agencies — Moody’s, Fitch and Standard & Poor’s — together account for 90% of the global ratings market.
The idea of a non-western credit ratings firm for emerging markets has been in discussion among the leaders of the BRICS nations — Brazil, Russia, India, China and South Africa — for the past few years as the criteria used by western credit rating agencies for rating emerging economies has often come under critical evaluation.
Emerging market economies claim that western ratings firms are biased, optimistic on developed nations and pessimistic on the developing ones. Russia in particular along with China have been particularly perturbed with the former alleging that the western rating agencies had deliberately lowered Moscow’s rating after the Ukraine crisis.
The credit rating agency for emerging markets, as it is tentatively called, is likely to take shape at the BRICS Summit to be hosted by India in October.
To read the whole article, BRICS may set up ratings agency for emerging markets in October meet, go to the website of the Economic Times.
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