Chinese Rating Agency Downgrades UK Sovereign Debt
May 24, 2011 · Posted in Global Economics
The WSJ writes Chinese Rating Agency Downgrades UK Sovereign Debt:
Chinese ratings provider Dagong Global Credit Rating Co. said Tuesday it downgraded the local and foreign currency sovereign credit rating of the U.K. from AA- to A+ with a negative outlook.
“The downgrade reflects the true status of the deteriorating debt repayment capability of the U.K. and the difficulty in improving its sovereign credit level in a moderately long term in the future,” Dagong said in a statement.
“Considering that the uncertainty arising from (future) monetary policy adjustments of the Bank of England and the spillover effect of the European countries…are likely to further worsen the government’s fiscal status, Dagong gives the negative outlook on the local and foreign currency sovereign credit rating of the U.K. (for the next) one to two years,” Dagong said.
Not that I know much about this Chinese agency.
But the more rating agencies join the market, the more the monopoly of Western state protected and regulated agencies, such as Moody’s, Fitch or S&P gets eroded, and that’s a good thing in my opinon.