pan-european

pan-european

Hong Kong: RusRating director pushes for 'balance' to US Big Three

1d ago
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M/S Richard Hainsworth, President of GlobalRating Group & General Director of RusRating, enters room SOT, Richard Hainsworth, President of GlobalRating Group and General Director of RusRating: "A rating agency that it is based in Hong Kong, it is so that we can provide to the investment world another set of views that can be used to balance the investments views from United States." M/S Richard Hainsworth sits during interview SOT, Richard Hainsworth, President of GlobalRating Group and General Director of RusRating: "So the opinions of analysts working in the Asian environment will be different in some places to the opinions of those working in the US environment." C/U Eyes of Hainsworth SOT, Richard Hainsworth, President of GlobalRating Group and General Director of RusRating: "So when the global crisis hit the world, Russia did not succumb, but countries like Greece, Spain, and Ireland did have problems. So the rating methodologies were wrong." C/U Hands of Richard Hainsworth SOT, Richard Hainsworth, President of GlobalRating Group and General Director of RusRating: "The ratings that are issued by the American agencies are lower for companies in Asia-Pacific, in emerging countries, than equivalent types of companies in the United States." M/S Richard Hainsworth relaxes on a sofa SOT, Richard Hainsworth, President of GlobalRating Group and General Director of RusRating: "They got it wrong in rating European countries. They got it wrong in rating companies in the emerging markets." M/S Richard Hainsworth leaves room SCRIPT Hong Kong: RusRating director pushes for 'balance' to US Big Three Richard Hainsworth, President of GlobalRating Group and General Director of RusRating, spoke of the need for 'complimentary' views to credit rating reports by the three major US credit ratings agencies in Hong Kong on Wednesday. Credit ratings evaluate the ability of businesses and governments to pay back owed debt as well as the likelihood of a default. Investors rely on credit ratings in order to make informed decisions about risk and return when committing large sums of capital. US credit rating agencies Moody's, Standard & Poor's and Fitch Ratings, called the Big Three, currently dominate the credit rating market, accounting for roughly 95 per cent of market share according to the Council on Foreign Relations. However, these companies have come under increasing criticism stemming from favourable ratings of companies such as Lehman Brothers prior to the financial crisis of 2007. Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. The Big Three had also given top-tier ratings to 'mortgage-backed securities' issued by major US investment banks, which they quickly downgraded once housing prices began to tumble in 2007. Further, according to EU officials, the Big Three 'accelerated' the EU sovereign debt crisis by relegating Greece, Portugal, and Ireland to "junk" status as well as downgrading the ratings of nine other eurozone countries. Regarding the Big Three, Hainsworth says: "They got it wrong in rating European countries. They got it wrong in rating companies in the emerging markets." On June 7, the European Securities and Markets Authority (ESMA) officially granted Hong Kong based credit rating agency Dagong Global with a pan-European license. European companies are set to open their books to the Chinese company beginning June 13. According to Hainsworth, "The ratings that are issued by the American agencies are lower for companies in Asia-Pacific, in emerging countries, than equivalent types of companies in the United States." Despite the ratings discrepancy, Chinese companies and state-owned enterprises continue to grow already substantial investments around the world. China's Outward Foreign Direct Investment increased by 12.6 % in 2012 exceeding $77 billion (€58) according to data by The Economist. Known as one of the world's largest creditors, China holds $3.44 trillion (€2.58 ...