MALAYSIA WANTS CREDIT RATING AGENCIES TO BE GOVERNED BY REGULATIONS

From Nor Baizura Basri

LIMA (Peru), Nov 20 (Bernama) -- Malaysia has proposed that credit rating
agencies be governed by regulations and best practices at the ongoing
Asia-Pacific Economic Cooperation (Apec) ministerial meeting here.

This move would enable rating agencies to be held accountable for their
action and ensure that investors receive accurate assessment of the credit
worthiness of companies, International Trade and Industry Minister
Muhyiddin Yassin told reporters Wednesday.

Muhyiddin said he made the proposal on the first day of the ministerial
meeting among Apec economies.

Malaysia's call comes amid rising criticism against international credit
rating agencies for their inability to detect and forewarn about the subprime
mortgage crisis although signs were imminent some time ago.

Analysts said that such agencies have either been unfair or have been
inaccurate in their rating of economies such as Malaysia by being too alarmist
about the current political situation, creating concern among foreign investors.

Recently, Fitch downgraded Malaysia's sovereign rating from "positive" to
"stable", saying the economy would be hit by lower oil and commodity prices,
when the economy had been growing moderatey with the government taking
proactive measures to mitigate against any significant downturn.

Muhyiddin also said that the proposal for the reform and establishment of a
sound financial architecture was likely to be brought before Apec leaders when
they converge for their summit this weekend.

Member economies would push for the establishment of tight protection to
financial institutions so that they become more transparent, he said.

"In addition, the financial architecture aspect may need to be reviewed for
it to be reformed. This proposal will be brought to the leaders' summit later,"
the minister said.

"We need a financial system which is more transparent as the current
financial crisis has shown the deficiencies of financial institutions," he said.

During the ministerial meeting, Malaysia shared its experiences in handling
the 1997/98 Asian financial crisis through various initiatives taken to
strengthen the financial system with stricter surveillance, monitoring and
supervisory measures to safeguard the soundness of the country's financial
system.

Malaysia also stressed that the lack of transparency in the private sector
has resulted in financial market players causing systemic turbulence and member
states are encouraged to take collective action and make the private sector more
accountable for disclosing accurate information in a timely manner.

On Malaysia's trade outlook for next year, Muhyiddin said despite a
positive trade performance this year, there would be a slight decrease of two
percent from the current projection of seven percent.

"We will continue to take appropriate measures to reduce the impact of the
global financial crisis on our trade. These include increasing promotions to
help exporters in finding new markets," he said.

The government, he added, would continue to monitor the global financial
situation to ensure development of the country's economy.

-- BERNAMA