(Yicai Global) July 4 -- The People's Bank of China (PBOC) has approved foreign financial rating agencies' entry into China to ply their business.
PBOC seeks to thereby add allure to domestic credit bonds to lure foreign capital.
Foreign financial rating agencies may now rate bond credit in the inter-bank bond market, the central bank said yesterday, but must first register with PBOC and then with the National Association of Financial Market Institutional Investors. Regulators can limit or suspend those agencies the results of market-based evaluations disqualify or those whose rating quality investors reject, PBOC added.
Reasonably introducing foreign financial rating agencies into China will boost market competition, develop the domestic bond market, and increase the comparability and reference value of rating results by introducing an investor-oriented market-based evaluation mechanism, Yang Qinyu, general manager of the Policy Research Department of China Bond Rating Co., told Yicai Global.