The US has an array of credit rating agencies that rate firms and countries on their financial health and repayment abilities. The top three US credit rating agencies include Moody’s, Standard and Poor’s (S&P), and the Fitch Group. The US credit rating agencies dominate the global market and can make or break a company’s prospects with their reports. However, BRICS now aims to put an end to the US credit rating agencies by creating their own ranking ability firm.
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BRICS countries have been affected by the US credit rating agencies who have previously pointed out negatives ignoring their positives. The BRICS bloc plans to launch its own credit rating agencies to counter the US-dominated financial world order. The move will put the BRICS alliance in charge and decide the creditworthiness of a firm and not depend on the US.
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BRICS: A New Credit Rating Agency On the Cards
Russia’s Central Bank Governor Elvira Nabiullina said that Kremlin will propose key initiatives that benefit BRICS in the long run. Nabiullina confirmed that one of the key initiatives is the formation of new BRICS credit rating agencies. The Governor stressed that the BRICS rating agency will be a “supranational” and cover all countries.
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Nabiullina explained that the BRICS rating agencies will be of mutual recognition and will work “faster and more practical”. The Russian governor hinted that US credit rating agencies carry a sense of bias against developing countries during their auditing.
The formation of the BRICS rating agency could be discussed at the 16th summit in October 2024. Russia will host the next BRICS summit and has a platter of ideas to provide at the table for leaders to discuss. The ideas also include creating a new internet service that has no connection to US data and servers.