Why Does A Credit Rating Trigger The Global Economy?

　　 credit Grade:

"One word shocked the world"

This is one of the most influential events in the history of world rating since the 40s of last century.

This is the world's largest economy, and the US Treasuries have fallen from its peak for the first time.

The global market triggered by the downgrade turbulence They all come from a rating agency called Standard & Poor's.

Why can a credit rating trigger the "unexpected storm" of the global economy? (comprehensive newspaper report)

Freedman, the author of "the world is flat," once said, "we live in the two superpower world, one is the United States, the other is Moodie. The United States can destroy a country with bombs. Moodie can downgrade and destroy a country with bonds.

This is not a joke, but this time the destroyer turned into standard and Poor's.

Almost overnight, the sovereign credit rating of the United States rose from the peak of "AAA". drop The global stock market suddenly plummeted, and the future of the global economy was covered with "fog". And behind the scenes, "pushing hands" is the three largest international rating agency's S & P recently released a report. In the report, S & P downgraded the US sovereign credit rating from "AAA" to "AA +". Another two main rating agencies, Moodie and Fitch, maintain the "AAA" rating for the United States.

Where did the three big international rating agencies come to speak of the strong voice of the global economy? Wang Jianye, chief economist of the China Import and export bank, and other experts analyzed that credit rating is a "credibility product", and credit rating agencies are regarded as one of the most important hub in the international monetary and financial system, which controls the pricing power of the global bond market and capital market.

Honesty is the cornerstone of economic life, and market economy is essentially a credit economy. Especially in the field of Finance and fictitious economy, the right to speak of credit plays a decisive role. Hu Aijun, director of Credit Management Office of Shanghai credit information office, said.

The special function of credit has given birth to the credit service industry. With the development of financial market, financial products and derivatives are more and more abundant, and the role of "gatekeeper" of credit rating is increasingly prominent.

Controversy: rating agencies have repeatedly broken faith

When the financial crisis in Southeast Asia was brewing in 1997, the three major international credit rating agencies failed to issue an early warning. After the outbreak of the crisis, they panic again and aggravate the market panic.

Before the bankruptcy of Enron Corp in 2001, the three rating agencies listed them as investment grade. However, on the fourth day before Enron's crisis, its investment rating dropped to three level. Enron's credit rating quickly dropped to speculative level, which led to bankruptcy of Enron.

When the debt crisis broke out in the US in 2007, the international top three rating agencies were also strongly questioned by the market. From 2002 to 2007, the three largest institutions rated the vast majority of mortgage loans of about 3 trillion and 200 billion dollars into the highest level of AAA. When the crisis came, they quickly reduced the level of these financial innovative products, amplifying the crisis effect and being accused by international public opinion as "accomplices".

The three largest rating position

Carol Siru, chief executive of S & P, said the market was too concerned about rating agencies. "We do not warn against risks, but now people say we have warned too much."

Let's take a look at the S & P curriculum with pure "American blood". In 1860, Henry Poole published a history of American Railways and canals to explain the complex financial situation of the United States railroad. Soon after, Henry Poole founded H.V&H.W.Poor company with his son. In the 70s of last century, the SFC recognized the S & P as the "national designated rating organization". The agency also owns the prestigious S & P 500 index.

Moodie is also from the United States. Its founder, John Moody, pioneered the use of letters to grade railway bonds in 1909. By 1924, the Moodie rating had covered nearly 100% of the US bond market.

Fitch is the only European rating agency in the world's three largest rating agencies. Its headquarters were in New York and London, and was founded by John Fitch in 1913. 97% of the company's share is controlled by FIMALAC, France.

S & P, Moodie and Fitch three monopolized the international rating industry. The market share of the former two is about 40%, and Fitch's market share is about 14%.

The backstage driver of the US downgrade -

S & P "Three Musketeers"

According to the New York Times, there are three people who have decided to downgrade the US rating: David Beers, head of the S & P sovereign rating, his deputy John Chambers, and Nikola Swann, a ratings analyst in the United States, Canada and Bermuda. On Friday, local time, they were discussing with the US Treasury officials to reduce the sovereign credit rating of the United States. Treasury officials said they could not agree with analysts. A few hours later, the United States was demoted.

Reflect

Where is China's right to credit?

China's credit rating industry started at the end of the last century in 80s, and the real large-scale bond rating is less than 5 years. Compared with the old rating agencies, the international influence of China's rating agencies is not enough. As a creditor country, China should strive for the right to speak internationally, support the development of local rating agencies, make investment decisions with reference to the rating results of local rating agencies, and establish a unified certification system for credit rating agencies in line with China's national conditions.

Germany intends to set up European rating agencies

According to Xinhua news agency, in December 2009, Fitch, standard & Poor's and Moodie "three giants" announced the reduction of the Greek sovereign credit rating, and unveiled the curtain of Greece's debt crisis and the European debt crisis. More than a year later, the "three giants" were in Europe. German leaders have called for the establishment of their own rating agencies in Europe. Roland Begg, a German management consulting firm, is now in contact with the federal government of the Hesse and the German Stock Exchange, and intends to establish a European rating agency.