BRICS Discusses an Idea over a New Rating Agency
The key idea discussed during the third annual "Doing Business with the BRICS" conference in Washington was establishing a rating agency within BRICS. However, the idea was not accepted by the World Bank. Otaviano Canuto, senior advisor on BRICS at the World Bank group, stated during the conference that he considered the idea of establishing a rating agency suggested by the BRICS to be doubtful. The point is that rating agency should be independent from government.
Accordingly Canuto stated that the likelihood of establishing such an agency within BRICS members is “very low”. The senior advisor mentioned that there are only a few cases when a rating agency can claim to be independent if it is sponsored by government, Sputnik News reports.
In the beginning of 2015, experts from BRICS countries have discussed an idea to establish a new rating agency in order to counterbalanced the ones that are already existing and because their economic assessments are based on western rating agencies. Senior advisor Canuto also agreed that it is natural and desirable for the world economic system to get new rating agencies. He noted that increasing number of such agencies does not mean that they have to be officially sponsored, otherwise the outcome of the rating agency is seen by the investors as very much politically influenced.
The claim made by BRICS to have a new rating agency is quite understandable. It is predictable that the institution which is formed to assemble economic power in order to counterbalanced Western authorities should demand to have new rating institutions. The three credit rating agencies- Moody’s, Fitch and Standard & Poor’s are all based on western economic cultural values.
Probably the idea to establish a new rating agency comes after all the three mentioned agencies downgraded their ratings over Russian credibility. According to the Russian point of view, on the contrary, it is the result of the West sanctions over
Although from the BRICS' point of view the idea seems to be reasonable, for it to become possible to be realized, the BRICS has to look for a different way to approach to the question in order to exclude the rating agency dependence on government.
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