Bertelsmann Stiftung and International Experts to Develop New Rating Agency
Goal is an independent, nonprofit organization that makes use of transparent criteria
In light of the extensive criticism currently being leveled at international credit rating agencies, the Bertelsmann Stiftung has announced it is moving forward with a model for a nonprofit rating agency. Over the coming months the foundation will work with a group of international experts to carry out a study outlining a new type of agency whose sole purpose will be to evaluate individual countries.
“The Euro crisis has shown that not everyone is happy with the existing ratings agencies,” said Gunter Thielen, chairman and CEO of the Bertelsmann Stiftung. “Many feel the agencies lack a degree of legitimacy and transparency and that the criteria they use for their country analyses are too narrow.”To increase the new agency’s neutrality and acceptance, it will be structured as a nonprofit organization. Beyond the traditional criteria of economic and financial performance, the country ratings issued by the agency will examine factors relating to political governance, such as the willingness to carry out reform and the ability to take effective action. According to the Bertelsmann Stiftung, the agency will focus on ensuring its evaluation criteria and qualitative assessments are transparent and on making available all of the information and data used in its country reports. Traditional ratings agencies also carry out political assessments, but they are often based on information that is not readily transparent, the foundation said.
“It is critical that the applied criteria are as comprehensive as possible and that they not only examine financial and economic realities, but also each country’s political management and its ability to implement reform,” Thielen said.
The Bertelsmann Stiftung CEO emphasized that the new organization is designed to complement the work done by existing agencies. “One prerequisite is that policymakers in both Europe and the United States recognize the need for comprehensive country assessments, since this is not about creating a ‘European’ alternative to the ‘Anglo-American’ model. Our model is instead meant to be an additional resource that will examine individual countries in depth and over the long term.”
The study’s first draft is planned for spring 2012, when the Bertelsmann Foundation North America, the Bertelsmann Stiftung’s US-based affiliate, will organize its annual conference, held just prior to the IMF and World Bank Spring Meetings in Washington. In developing the agency, the Bertelsmann Stiftung will collaborate with other international think tanks in addition to its own network of experts.
For over 10 years the Bertelsmann Stiftung has used a number of projects, including its Transformation Index (BTI) and Sustainable Governance Indicators (SGI), to measure economic and sociopolitical developments. When carrying out these international governance assessments it works with a network of more than 300 experts and analysts in over 150 countries.
Sustainable Governance Indicators 2011more