BRICS countries agree to set up credit rating agency:
BRICS countries on Sunday agreed to set up an independent rating agency based on market-oriented principles saying it would further strengthen global governance architecture. The five countries have already set up New Development Bank, which became operational last year, to meet funding requirements of the members.
Batting for a new credit rating agency backed by five countries group, New Development Bank president KV Kamath had expressed concerns over methodologies of the big three global agencies saying that these are constraining growth in emerging nations. Kamath had said despite having deep capital buffers, the ratings of multilateral banks like the BRICS-promoted NDB are affected due to the parent countries’ sovereign ratings.
Citing the case of NDB itself, which is planning to get itself rated for bond-raising in many countries, he had said its rating will be affected because the promoter countries are not AAA-rated.