Chinese, US, Russian firms to set up ratings agency

Chinese ratings agency Dagong said on Tuesday it was tying up with US and Russian partners to form a new \"independent\" group to rival US-based agencies it claims have \"proven inadequate\". The Chinese firm will set up the joint venture with Egan-Jones Ratings Co. (EJR), based in Pennsylvania, and Russia\'s RusRating JSC, it said in an invitation for a press conference Wednesday to unveil the new company. The joint venture, called Universal Credit Rating Group, will engage in global ratings affairs \"as an entirely independent rating service provider\", Dagong said in the letter. \"The current international credit rating system has proven inadequate to the task of producing responsible and reliable ratings,\" it said, adding a new institution is needed to \"mitigate economic risk in the development of human civilisation\". The three partners \"do not represent the interest of any particular country or group\" and Universal Credit Rating Group will \"provide impartial rating information to the global capital markets\", it said. US-based agencies Fitch, Standard & Poor\'s and Moody\'s -- responsible for giving risk assessments to investors -- were widely criticised for failing to warn about the impending global financial crisis in 2008. Many of the debt instruments linked to the US housing market that sparked the crisis were given the highest possible rating by the groups. Dagong chairman Guan Jianzhong insists his agency is fully independent -- and stands by his criticism of his rivals, whose ratings are crucial in determining the interest rates at which countries and companies can borrow. EJR was granted status as a \"nationally recognised statistical rating organisation\" by the US Securities and Exchange Commission at the end of 2007, according to the SEC website. EJR says on its website that it exclusively serves \"buy side institutional investors\". RusRating, based in Moscow, focuses on ratings for the banking sector.