There is enough evidence to support the notion that the credit rating industry has misjudged the quality of many of the products that it rated, maintained a too familiar relationship with the companies it rated, filled a quasi-regulatory role and made quasi-political decisions rather than professional judgments. Damage was wide and went far. It touched the vital interests of the investor, undermined the reputation of the credit rating and investment industries and undermined performance in the entire banking and finance sector of many countries.

Is there an alternative? The answer may lie with Dagong of China. Their credit rating system deviates in terms of criteria and, possibly, the rigor of the analysis. It is a quality waiting for testing. The Middle East capital market has to develop a position on the issue. So far, reliance on US agencies is creating a serious problem. Alternatives would include a joint venture with other alternative sources, including the Chinese as well as independent credit rating agencies for Islamic finance instruments.