Traditionally bonds for corporates, banks and sovereigns have been rated by Moody's, Standard & Poor and Fitch. All three of these rating agencies are based in the U.S. It is not surprising given the size of the U.S. bond market and the large institutional investor base here. Of course the size of U.S. debt markets may call in to question the objectivity of U.S.-based rating agencies. These were the same rating agencies who missed the problems in real estate loans and derivatives in 2008.
As reported in this post, capital markets are increasingly becoming influenced by Asia and the capital being accumulated there. So it comes perhaps as no surprise that China has developed their own rating agencies. The leading rating agency is Degong Global. Degong downgraded the U.S. credit rating from AAA to AA+ in 2010. Some might speculate that the downgrade was politically motivated. Hard to believe that Degong, based in the most politicized capital market in the world--China, has much likelihood of being taken seriously.
Might be a good new business idea to start a rating agency based in Singapore or Switzerland where political interference would be minimal, no allegations of vested interest are likely and home country debt is not significant enough to affect ratings.
I found this story on Big Think, who found it on Mail.
