Prime Minister Vladimir Putin on Monday challenged Western ratings agencies that have downgraded Russia's debt, calling for the creation of Russian ratings firms that he said better understood its economy.
Less than a week after Fitch became the latest agency to slap a downgrade on Russia, Putin said that in the future all debt ratings agencies would be required to seek accreditation from the Russian finance ministry.
"We are interested in the emergence of strong domestic ratings agencies that are better equipped to study the specifics of the Russian markets in their estimates," Putin told a Cabinet meeting.
His comments come after Fitch Ratings last week downgraded Russia's long-term foreign and local currency issuer default ratings, following similar moves in December by Moody's and Standard and Poor's.
Putin complained that the lack of Russian agencies had caused a "total dependence by Russian businesses on international ratings agencies."
He added that foreign agencies are "focused on the economies, customs and business practices of other states."
Ratings agencies advise investors on the creditworthiness of both governments and companies, issuing ratings that give an indication of the capacity of a state or corporate debtor to pay back creditors.
When applied to a state, the agency is essentially telling investors how safe it is to invest in its government bonds, which provide an essential method of state financing.
Putin said the Russian government understood the importance of ratings and even used them for its own investments.
"All of us understand the enormous influence of rating agencies and drastic effects their mistakes, let alone abuses, may have," Putin said, according to a statement.
All debt ratings agencies will be required to seek accreditation in the future, he said, adding however, that the "accreditation process should be voluntary, with the maximum transparency and ease."
"In turn, that will give more reliable guidelines for investors and do away with the absurd situation in which entities evaluating the reliability of others are exempt of any control," he said.
The move will help to create a registry of all ratings agencies working in the country, which will in turn stabilize Russia's tumultuous financial markets, he said.
Accreditation would be given to agencies whose work is deemed to be accurate and reliable, he added.
Plummeting commodity prices and capital flight - a result of the global economic downturn - were the key factors cited in Fitch's recent decision to downgrade Russia's debt rating last week. It was the first time that the ratings agency had downgraded Russia since the 1998 crisis, which saw the value of the rouble plummet and the country default on its foreign debt.
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