Chinese, U.S., Russian agencies set up rating group

Three rating agencies from China, the United States and Russia will jointly launch a new credit rating company to rival current industry leaders and promote independence.

It was announced on Wednesday that the Universal Credit Rating Group will be established by China's Dagong Global Credit Rating Co., Ltd., the U.S.-based Egan-Jones Ratings Company, and Russia's RusRating. The headquarters will be set up in Hong Kong within six months, the companies said in a statement.

The group will be invested by private institutions without conflicts of interests with its credit ratings and will not represent any country or interest group, the statement said.

Guan Jianzhong, president of Dagong Global Credit Rating Co., Ltd., urged an overhaul of the current international credit rating system, which he criticized.

"As the main providers of rating information that global capital flow relies on, the three major rating agencies in the U.S. failed to ring the alarm bell for the financial crisis and even helped aggravate the crisis," said Guan.

The U.S.-based "Big Three" global credit rating agencies -- Standard and Poor's, Moody's, and Fitch Ratings -- have come under fire for their credibility during the global financial crisis.

Sean Egan, president of Egan-Jones Ratings Company, said overly optimistic credit ratings led to the financial crisis and the current international rating system can no longer meet investors' demand.

Guan said the new rating group will provide fair and true information about debtors, make a new international standard for credit rating and promote an independent global rating regulatory system.