Economy

BRICS agrees to set up credit rating agency

Goa (India), 17 Oct – The five-nation group BRICS agreed to set up an independent rating agency based on market-oriented principles, saying it would further strengthen the global governance architecture.

“We believe that BRICS institution-building is critical to our shared vision of transforming the global financial architecture to one based on the principles of fairness and equity,” the declaration stated. “…to further bridge the gap in the global financial architecture, we agreed to fast-track the setting up of a BRICS Rating Agency,” Prime Minister Narendra Modi said in a statement at the conclusion of the BRICS Summit.

Batting for a rating agency backed by BRICS, New Development Bank president K.V. Kamath had expressed concerns over methodologies of the three global agencies (S&P, Fitch, Moody’s) saying that these constrain growth in emerging nations. He had said that ratings of multilateral banks like the BRICS-promoted NDB were affected by the parent countries’ ratings, despite having deep capital buffers.
PTI

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