Head of Chinese Central Bank: We’ll create our own ratings agencies

admin Contributor
Font Size:

Bloomberg reports that the head of the Chinese Central Bank, Zhou Xiaochuan, has encouraged a reduced reliance on foreign ratings agencies. Instead, the Chairman of the PBOC encouraged domestic institutions to develop their own research resources.

In the wake of the serious misjudgments preceding the financial crisis and the explorations of fundamental conflicts of interest inherent in their business model that succeeded it, ratings agencies have been subject to criticism for many corners.

What makes Chairman Zhou’s comments interesting is his suggestion that significant resources will be deployed domestically to create competitors to the traditional, Western-based ratings firms.

From Bloomberg:

“With the rapid expansion in China’s bond market, we need rating companies that are familiar with the Chinese situation,” said Lu Zhengwei, Shanghai-based chief economist at Industrial Bank Co., who was rated the nation’s best analyst in 2010 by China Business News newspaper. “We see comments from rating companies during this round of the crisis have influenced the financial market to a large degree. It’s no surprise China is paying attention to them.”

Please follow Clusterstock on Twitter and Facebook.

Join the conversation about this story »

See Also: