When I woke up this morning and scanned through my usual digest– boots on the ground reports from overseas contacts, market summaries from Asian and European bankers, commentary from friends still in the intelligence community– a couple of things caught my eye that I want to tell you about.
Dagong Global Credit Rating Co is China’s leading credit rating agency. Credit rating agencies are the firms who are responsible, among other things, for scoring the credit risk of a particular asset or sovereign nation.
When they rate a security as “AAA”, premium safety, investors pile in. They’re an integral part of the financial system.
You undoubtedly remember that the world’s leading agencies– Fitch, Moody’s, and S&P, were all complicit in slapping AAA premium ratings on so many toxic mortgage-backed securities… and maintaining sound ratings for far too long on bankrupt nations like Greece and Portugal.
The entire industry lacks credibility at this point, and China’s Dagong agency aims to do something about that.
This morning I read Dagong president Guan Jianzhong’s remarks at a recent conference of Asian rating agency CEOs held in Kuala Lumpur, Malaysia (one of my favorite cities).