On the heels of last week’s downgrades by Fitch and Moody’s to just above junk status, The Central Bank of Russia (CBR) has issued a statement that it will no longer use credit ratings from Standard & Poor’s, Fitch, or Moody’s that were assigned after March 1, 2014. All credit ratings will now be at the discretion of the Board of Directors of the Bank as regulators assess whether or not the ratings made after March are accurate. Sounds like Spain, Greece, and USA’s previous derision over ratings agencies proclamations is heading east.
The Central Bank of Russia will no longer use credit ratings from Standard & Poor’s, Fitch, or Moody’s that were assigned after March 1, 2014.All credit ratings given to Russian companies and banks will now be at the discretion of the Board of Directors of the Bank,according to a press statement Monday. The regulator will assess whether or not the ratings made after March are accurate.The decision comes after Fitch and Moody’s downgraded Russian sovereign debt to just above junk status. Standard & Poor’s will decide whether it cuts Russian debt to junk level by the end of January after cutting it last April, after Crimea rejoined Russia and the West began to levy sanctions against Moscow.
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On dates of credit ratings’ use for the purpose of Bank of Russia regulationsIn line with scope of authority established by Bank of Russia Ordinance No. 3453-U, dated 25 November 2014, ‘On the Specifics of Credit Ratings’ Use -to Implement Bank of Russia Regulations’, the Bank of Russia Board of Directors determined the dates when credit ratings shall be assigned to implement Bank of Russia regulations.Under this Ordinance, should any Bank of Russia regulation contain information on credit rating assigned by Standard&Poor’s or Fitch Ratings or Moody’s Investors Service to credit institutions or other Russian legal entities, constituent territories, municipal entities, their issued securities or other financial instruments, the date when the mentioned rating is assigned (hereinafter, the rating date) may bedetermined by the decision of the Bank of Russia Board of Directors in the corresponding regulation.According to Bank of Russia Board of Directors’ decision, the rating date for credit institutions and their issued financial instruments, including securities, to implement Bank of Russia regulations, shall be 1 March 2014; as for other entities, listed in the Ordinance, and their issued securities, this rating date shall be 1 December 2014.
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“They’re private companies, so we assume that they’re completely independent and not subject to political pressure.However, they do exist in an American context and are subject there to the international media’s reporting which tends to give a single narrative – a very negative narrative when it comes to reporting – particularly the Russia story,”
All sounds very similar to the responses that troubled and over-indebted western nations had when the ratings agencies dared to downgrade them.
