LONDON Credit ratings organisations from five countries are launching a new global agency, touting it as an alternative to the Big Three agencies which they say no longer meet the needs of the new globalised world.
In a statement on Tuesday, ARC Ratings said the agency would launch in London as a joint venture between CPR of Portugal, CARE Rating of India, GCR of South Africa, MARC of Malaysia, and Brazil's SR Rating.
A spokesperson said the agency would officially launch in December or January, a delay from the launch date of November 20 given in the statement earlier. The delay was due to logistical complications in bringing the five agencies together, the spokesperson said.
The credit ratings business is dominated by Moody's, Standard & Poor's and Fitch, which together are estimated to control more than 90 percent of the market. The former two are based in the United States while Fitch has dual headquarters in London and New York.
Ratings are a key part of the financial system as investors use them to judge how likely they are to get their money back, but the financial crisis has led to unease that the market is relying on them too much.
ARC said the dominance of the three amounted to an oligopoly of sorts, U.S. centric and prone to failures, as highlighted after the 2008 subprime crisis in the United States and the euro zone's more recent problems.
"Working together (the agencies), will provide ratings answers to the new multi-polar world economy in direct competition with US-centric agencies," ARC said in the statement, adding that its ratings would be guided by a "multi-perspective approach and local expertise".
"An automatic centre of gravity is replaced by a global cooperative approach to credit ratings," ARC added in a paper posted on its website.
The chief ratings officer of ARC will Uwe Bott, while Jose Pocas Esteves, currently at the Portuguese agency CPR, is to be CEO. The agency is registered with the European Securities and Markets Authority
The Pentagon releases photographs linked to allegations of abuse of detainees in Iraq and Afghanistan.