Chinese, US, Russian firms in partnership to form new rating agency

Three leading rating agencies from China, US and Russia have teamed up to form a new independent credit rating joint venture to rival the dominance of the big three US rating agencies - S&P, Moody's and Fitch.

The Universal Credit Rating Group (UCRG) with its headquarters in Hong Kong will be established by China's Dagong Global Credit Rating Co Ltd, Egan-Jones Ratings Co (EJR) of the US and Russia's RusRating.

In a statement Dagong said, "The current international credit rating system has proven inadequate to the task of producing responsible and reliable ratings.''

A new agency is needed to mitigate economic risk in the development of human civilisation, it said.

Private institutions without conflicts of interests with the new agencies credit ratings will invest in UCRG and will not represent any country or interest group and work ''as an entirely independent rating service provider'', Dagong said.

Beijing-based Dagong is a leading Chinese rating agency established in 1994. But, its ratings of US debt in 2010 and 2011 which were lower than the big three's ratings were not recognised by the US Securities and Exchange Commission (SEC).