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China’s Central Bank Chief Criticizes the World’s Three Major Credit Rating Agencies

Zhou Xiaochuan, the Director of the People’s Bank of China, spoke at China’s 3rd Economic Outlook Forum, which was held in Beijing on December 25, 2011. Zhou criticized the world’s three major credit rating agencies, Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, because they lack the capability of making predictions. According to Zhou, these credit rating agencies tend to exaggerate problems or achievements. If a company has a problem, these agencies make it look worse; if a company does well, they flatter it, making it into more than it is. Therefore, Zhou urged that China reduce its dependence on overseas credit rating agencies and support the development of China’s own, home-grown rating agencies.

Source: China National Radio, December 26, 2011