Brics ratings agency a pipe dream
Plans by the five-nation group of developing countries – namely Brazil, Russia, India, China and South Africa (Brics) – to form their own credit ratings agency, aimed at challenging dominant Western agencies Fitch, Moody’s and S&P Global, would be a ”waste of time”, said Treasury’s directorgeneral, Lungisa Fuzile.
He added that these plans, announced by Brics members in October, were mooted for political reasons as they had expressed the belief that Western agencies favoured developed economies.
Sibongiseni Mbatha, head of the Association of Black Securities and Investment Professionals, said Brics would challenge the existing rating system by having prospective investors pay for the rating of an issue of a debt instrument.
“In preparation for the Brics agency, Exim Bank [an Indian bank] has prepared a proposal and ratings agency Crisil has conducted a study for India,” he said.