Agencies in Russia and China will gain more trust as they increase their effectiveness and visibility
Russia decided to create it's own rating agencies for its industries. A Stratfor expert on economics, Mark Fleming-Williams believes that by doing so, Moscow will be able to reverse the situation where 96% of all credit ratings are made by Western organizations, which impact the cost of loans for Russian companies.
Experts from the American research company Stratfor predicted the success of the Russian and Chinese rating agencies. This was stated by the economist mark Fleming-Williams in the report, which aired on InoTV. Russia already has a national rating Agency "Rus-Rating". According to Williams, this is important for two reasons.
"First, industry in fact, sets the tone throughout the investment management industry, that is, it determines whether the investors should buy stocks and bonds or not. Industry credit ratings to a large extent decide whether this or that company is stable or not, and how likely is it to default. As a result, if a credit rating agency lowers the rating of the securities, the cost of obtaining credit for the company increases. The second reason this is important, especially for Russia, is that right now 96% of the credit ratings of the Russian companies are done by three American agencies", — he explained in his position as an expert.
"The Chinese financial management industry in the next five years is expected to grow by six times. They have a huge and growing amount of capital that can go into something, like Russian bonds, as they currently seem to be very cheap due to the fact that all Western investors withdrew their money," explained Williams.