ASIA NEEDS ITS OWN RATING AGENCIES, SAYS NAZIR

By D. Arul Rajoo

BANGKOK, June 9 (Bernama) -- Asia needs to establish an Asian-owned and
managed rating agency as years of Western domination of finance has created an
inherent systemic bias that impeded the progress of Asian banks.

Nazir Razak, group chief executive of CIMB Group (Malaysia's second largest
provider of financial services), in stating this Tuesday, said this was
necessary especially since Asia was the main supplier of investment funds.

"It seems that even when Asians look at one another, we tend to use Western
spectacles. The clearest evidence is our reliance on global credit rating
agencies," he said in his keynote address at the Third Euromoney Thailand
Investment Forum here.

Nazir said he could not understand the basis of China, the world's biggest
lender, being accredited A1 by Moody's compared to AAA for the UK and AA2 for
Italy.

"Fitch is no different -- China at A+, UK at AAA and Italy AA-. The story is
not too different for bank ratings -- Asia's lowly leveraged banks versus US and
European banks with 'intoxicated' balance sheets," he said.

Nazir said ratings affected how banks allocated capital and influenced the
level of transactions conducted between banks, adding that sovereign ratings
also defined the ceiling for national bank and corporate ratings, amplifying
ramifications of the problem.

"As if that isn't enough, the introduction of Basel II would compound the
problem as loans would also be subjected to ratings, trapping the entire credit
system in this biased web," he said.

Nazir also said that although colonialism ended some 50 years ago, Asians
maintained a tendency to be overawed by Western banks and bankers.

"Perhaps the global financial crisis will finally put an end to our colonial
mentality. Asia has long produced many great economists," he said.

Nazir cited Malaysia's policy that stood against the International Monetary
Fund (IMF) and conventional Western economic wisdom to successfully combat the
Asian financial crisis with lower interest rates, ban on short selling,
government bank recapitalisation, and bailouts of strategic companies.

"...policies that are all being pursued in the West today, and pursued
without even a whimper of protest from the IMF," he said.

He also said that the current crisis which started in the United States
provided a unique window of opportunity for Asian banks to decisively alter the
share of global banking in their favour.

Nazir, whose CIMB Group had acquired banks in Indonesia, Singapore and
Thailand and now has the largest network of branches in the region with 1,150,
said governments and corporates should give greater consideration to Asian
lenders and intermediaries.

"Once Asians have a greater share of global finance, I think that we will
also see a more balanced and equitable world where Western perspectives give way
to global perspectives, where a new financial architecture is designed without
prejudices and where intra-Asian trade and investment flows grow exponentially,"
he said.
-- BERNAMA