Saturday, August 07, 2010

yeah.., I said it!!!

xinhua | The head of China's largest domestic rating agency denied criticism by its western counterparts' of practicing populism, while reaffirming the agency's principals of independence, objectivity and fairness.

Based on long-term research on the credit economy and rules and experience of rating standards, the Dagong Global Credit Rating Co. Ltd provides impartial rating information in the post-crisis era, which has warded off swinging to domestic interests or so-called "populism", Guan Jianzhong, chairman of the Dagong Global Credit Rating told Xinhua in an exclusive interview on Wednesday.

In Tuesday's interview with the Financial Times, Harold "Terry" McGraw III, chairman and chief executive of the U.S.-based McGraw-Hill Companies, which owns Standard & Poor's, suggested that the Chinese rating agency follow a "populist mood", and lack transparency in publishing its policies, procedures and putting out assumptions and criteria.

Guan said the accusation is irresponsible for the western rating firm to label a new-born international rating agency as "populist", instead of carrying out self-criticism on its own highly politicized rating standards.

"Standard & Poor's failed to identify the debtor nations' currency depreciation, which infringed on the interests of the creditor nations, as the sovereign debt default. Such practice is the fundamental cause weighing on the instability of the international credit system," said Guan.

Guan also rejected reports that he suggested the government should have more control in credit rating decisions.

"It's a total sheer absurdity. I'v never made such a suggestion," he said.

"Dagong has been maintaining its independent, impartial and fair position, however, the independence of some U.S. rating firms needs to be questioned due to the close relationship between the shareholders and their clients,"said Guan, adding billionaire investor Warren Buffett is the largest shareholder in Moody's.