Five existing agencies have set out to break into the global market, which is currently dominated by Moody’s, Standard & Poor’s, and Fitch Group.
Brazil’s SR Rating, Malaysia’s MARC, India’s CARE, South Africa’s GCR and Portugal’s CPR are co-operating to set up the Europe-based agency, which has criticised the way ratings agencies behaved before the financial crisis.
Announcing the venture, chief executive Jose Pocas Esteves, who is currently head of CPR, said: “ARC and its five founding credit rating agency network partners believe that the old methods and approaches are no longer sufficient for the post-Lehman financial sector landscape.”
In the US, the activities of credit rating agencies in the run-up to 2008 were criticised heavily by the Financial Crisis Inquiry Commission.
According to Deutsche Welle, the largest three ratings agencies have a 95 per cent market share.
ARC says that it will use “a multi-perspective approach”, including local expertise, with the aim of better pricing risk.