UN Transcripts — https://transcripts.un.org/en/ecosoc/2026/14
Special Meeting on Credit Ratings (Panel 2, 3 and closing session) - Economic and Social Council, 14th meeting, 2026 session — Economic and Social Council — 30 March 2026
Language: en
Automatically generated transcript — may contain errors. Not an official United Nations record.

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ECOSOC · Vice-President [13:37]:

So I. I think we could start the leaks. I call to order the 40th meeting of the Economic and Social Council.

Distinguished delegates, I invite the Economic and Social Council to continue its consideration of sub item A of agenda item 11 entitled follow up to the International Conferences on Financing for Development. To continue with the special meeting of the Council on Credit Ratings, I invite the Council to begin its discussion on ratings and assessments, methodologies and time horizons. The second panel will examine how credit rating agencies may further adapt the methodologies to a changing global context, the information and data required by long term institutional investors to better assess and manage investment risks in developing countries and ways in which investors can make more effective use of information provided by credit rating agencies and other credit assessments. I'm pleased to welcome the distinguished presenters for this discussion. I also welcome Ms. Charis Pigel, Director of the Financing for Sustainable Development Office at the Department of Economic and Social affairs to moderate the panel discussion.

I look forward to an open, constructive and productive exchange of views. Ms. Pigil, you have the floor.


DESA · Director, FSDO · Shari Spiegel [20:29]:

Thank you so much, Vice President. And as many as you know, this is meeting as a follow up is one of the many new the three new ECOSOC meetings established under the Sevilla commitment. The UN has progressively advanced dialogue on credit rating agencies actually for quite, quite a while since I've been here.

In fact the first ones were in 2013 and 2014. There was an ECOSOC and General assembly meetings on rating agencies. Those really focused on structured products in the aftermath of the financial crisis of 2008-9.

And then in 2022 DESA had a high level meeting on rating agencies that was focusing on sovereign ratings in particular this was emphasized in the 2024 PAC for the future. And then of course the the discussions in FFD4. DESA has produced some a couple of two in depth policy papers and a shorter policy brief on these topics in 2022 that was also part of the inputs to the negotiations that later happened in Sevilla. One issue highlighted is that in the Sevilla commitment is on credit rating methodologies, particularly that they remain weighted in many ways towards more near term fiscal and macroeconomic metrics versus longer term horizons. And for countries that focus, and I should add that that focus is not just, as was really noted this morning, it's not just, it's a focus also of the markets that the markets themselves focus more on sort of short term factors.

And this is reflected in the, in many of the market analysis of countries and then the cost of borrowing as well. And for countries, however, that puts a greater focus on the near term versus a near term fiscal situation versus investing in future resilience or growth and can lead to actions that could be more towards cuttings spending in the near term rather than having longer term investments. Again, as I said, it responds in many ways to the short term nature of financial markets. So creditors who use ratings are often interested in the country's ability to repay creditors in the near term. But it may also leave segments of the market such as longer term investors missing relevant information.

There is increasing interest in whether methodologies could evolve to model based scenario analysis and stress testing, as was discussed to an extent this morning. And we heard from S and P that they're thinking about doing some of this. So that versus trying to make sort of long term predictions which we know would be very difficult to do. These would look at how countries perform under different scenarios and shocks and what are the probabilities, understanding probabilities of those events. So this brings us to our first panel this afternoon which will focus on rating methodologies and debt sustainability assessments and their time horizons.

We will examine how methodologies are evolving in a changing global context, including growing attention to long term risks and resilience, including the issue of investment and resilience. We will also consider the data needs of long term investors, particularly for investments in developing countries and the use of credit ratings alongside other assessments. So I'm going to go first to Mr. Lapo Guadagnuola, the head of center of Excellence and Methodologies at S and P Global Ratings. Lappo oversees the development, application and maintenance of all general and cross sector rating methodologies, including the maintenance and updates to rating definitions. So, over to you, sir.


S&P · Head, Center of Excellence for Methodology · Lapo Guadagnolo [24:13]:

So, thank you, Mr. President. Thank you, Ms. Pegle, Mr. Secretary General, Excellencies, distinguished delegates, ladies and gentlemen. So again, thank you for the opportunity to address the room on these special days on credit rating. So my name is Lapo Guadagnolo and I'm heading up the center of Excellence for Methodology S and P Global Ratings. So let me start by briefly describing how a rating methodology update works.

S and P is constantly Reviewing its methodologies, which is also by the way, a regulatory requirement that we have to, that we have to abide to. And by reviewing its methodology, I really mean that we want to make sure that at any point in time our methodologies are fit for purpose, that they appropriately address the risk that we consider important for determining the credit worthiness, which is the forward looking view of the issues that we raise. And that they really reflect all the structural changes in the macroeconomic landscape. New credit behaviors, new data, new risks that we think are important to determine our rating. So this clearly by definition includes also the global trends that you were mentioning that we all familiar with, from climate to technology changes like AI and DeFi to cyber supply chain and demographic changes.

So for all these areas, we really look at two things. We look at how much these risks are material and how much they are visible, both in the short medium and in the long term dimension. And clearly, I mean needless to say, all these dimensions are not only all that are very important, but they change over time. And they also change over time depending on where you look in the short term, medium term or long term. So really our job is to make sure that at any point in time the methodologies that we use to rate all the issues, including the sovereigns, take into consideration all these dimensions.

So before I run through some examples of changes that we have done recently in our methodology, let me start by saying that material changes to our methodologies is very important to remind everybody they do not happen in a vacuum. We typically propose changes to our methodologies in a public way. So we ask feedback to all market participants in an open and fair way with a process that we call the the request for comment and that is communicated on our website that is free for access for everybody who is interested. After we receive those comments, we take them into consideration and we publish the changes. So let me go then through the few changes that we've done just in the last couple of years.

So specifically for emerging and developing markets, just in the last couple of years, we have made important changes to critical parts of our methodologies. I will briefly list the most relevant ones and what they actually mean to the issuers, including the sovereigns in the emerging and developing markets. So let's start with the first one. In December 2023, we updated our rating definition to incorporate the so called climate resilience debt clauses or CRDCs. And by that I mean that since that change for sovereigns debt instruments with principal and or cumulative interest deferral features linked to predefined extreme natural disasters, we generally would not lower the issue or the issue rating today.

We will not put those ratings to default when such deferral is triggered, so long as we expect that the principal or the interest that wasn't paid will be paid, or we believe they will be paid within a period of time up to two years. So this is a very important update, which, as I said, we did in December two and 20,000, 2023, because it really gives temporary relief in terms of liquidity to sovereigns that are struggling in the aftermath of a natural disaster. And as you can imagine, it also reduces possibly the chances to having to deal with that restructuring process. So that was the first change. The second change that we did was in October 2025.

We also made important updates on the methodology that we used to rate multilateral institution or MLIs, which play an important role in the funding of the ecosystem of the emerging developing economies. In summary, based on extensive research of default and recovery data on loan performances that we got from various sources, we recalibrated and reduced the preferred creditor treatment risk weights applied to sovereign exposures. As a result, as my colleague Jim Wynken said in the previous panel, we estimate that everything else equal stronger capital position at the MLI could result in an additional 600 to 800 billion in lending capacity if I go to the third change. So we did again an update on a methodology which I think would be quite of interest to this audience that occurred in June 2025. And in this case we revise our assumption for the recovery rates that we apply to defaulted emerging market project finance assets in CLO transaction, which are basically a securitization or debt.

The revision really meant that, among other things, we really moved our assumed average recovery assumption up to a 70% from a base of 29% which was in the previous criteria. And put simply, this really means that the funding of portfolios of project finance assets domicile in emerging market countries, everything else equal. And assuming that there is a proper structure in place, those transactions might require less subordination. And therefore, if you think about it, better overall funding condition than previously. And finally, let me mention another change.

So this is a request for comment which we put out in the market in November 2025. And this is a request for comment for changes to our approach to a structure finance transaction above the rating of the sovereigns where the structure of finance assets are domiciled. And as the current criteria already explicitly says, structure finance transactions where the answers are domiciled in countries that where there is A reliance on the economy and the country risk of that particular domicile can be already rated up to six notches, which is the full two rating categories above the rating of the sovereign. And in this request for comment, which I said we published in November last year, we are proposing more instances even where this ability to go to six or even up to eight notches above the sovereign ceiling can actually achieve. So your excellencies and distinguished delegates and ladies and gentlemen, I will conclude my remarks by saying that of course the transparency is at the core of everything that we do and of course the availability of good data in the space of emerging and developing economies is very critical for us to conduct rigorous analysis and as I described to you, to allow us to update our analytical view when we believe that is warranted.

So with that I'll pass you to moderator.


DESA · Director, FSDO · Shari Spiegel [31:59]:

Thank you. Thank you for sharing those updates to your methodologies. I'm now going to go to Mr. Bart Ostiver Veld. Bart is the Chief Criteria Officer at Fitch Ratings.

The team he leads independently evaluates and approves for use of all of Fitch's rating methodologies and models and tracks the performance of his ratings and facilitates the reporting on these topics. So how does Fitch approach long term risks and investment in long term infrastructure and resilience in your current sovereign rating framework? And what are the main constraints preventing you from placing greater weight on long term factors? Thanks.


Fitch Ratings · Chief Criteria Officer · Bart Oosterveld [32:39]:

Yeah, thank you Director Spiegel and Ambassador Hovanisian.

And thank you distinguished delegates for the opportunity to share our perspectives and engage with the audience at this special meeting. At Fitch, we aim to have market leading criteria that deliver superior ratings performance and part of that effort is an open dialogue with all our stakeholders in our ratings. Our criteria are available for free on our on fitchratings.com and we are open, always open to feedback inside or outside of formal market consultation windows in terms of long term interest, infrastructure and resilience investments. And I'll talk about all our rating frameworks, not just our sovereign ones. In almost all relevant asset classes, including sovereigns, we are now incorporating considerations relating to long term physical and transition risk related to climate.

This analysis takes the form of an assessment of the potential exposure of future sovereign credit profiles to climate related risks. These risks are assessed on the assumption of reasonable future developments and responses made to climate risk. For example, the materiality of a risk from a rise in sea levels could also reflect additional infrastructure investments such as a seawall, rather than assuming no action at all is taken, or could reflect a reflection of a government's Capacity to partially diversify away from fossil fuels.

On the topic of rating horizons and the related topic of innovation in the rating system more broadly, I wanted to make the following additional remarks. The binding time horizon for the output of our analysis, the rating is the time horizon of the fixed income. Investor Director Spiegel just mentioned this. Default rates in fixed income are low. Even our non investment grade ratings default less than 4% of the time time over a one year horizon.

The investor's horizon starts the moment they buy the bond and is focused on the question in the short run where am I most exposed to non payment should something happen that is not in my base case, where is my second biggest exposure in that sense, what is my third? What is my fourth? Et cetera, et cetera. And that is the ratings ranking that the institutional investors that we serve are interested in. Another way to say this for the fixed income asset managers who manage retirement funds, and that's the vast majority, avoidance of a negative surprise in the form of a non payment is priority number one, and this is fixed income.

So these investors also capture no upside. Meaning if they invest in Country A and its economy grows by 6% a year between now and 2050 instead of 3% a year, they receive the same coupon.

As a result, we don't believe a non traditional rating, such as one with an unusually long time horizon on a traditional bond would have traction with mainstream investors. Were we to provide it, the market would price through it in the form of a higher premium. Where we think our ratings do add value to the conversation we are having today is applying our traditional ratings product to innovative or non traditional debt products.

I'll talk about three examples where a traditional rating can deliver lower cost of capital precisely because it puts the risk in the time frame and context that a traditional fixed income investor understands. And these are from our sovereign rating criteria. The first is deferable note that can carry the same rating as the sovereign itself and that is dependent on a predefined event such as a natural disaster.

As long as the amount deferred are expected to accrue interest, no haircut of face value and no significant extension of the final maturity is contemplated. The second example is our neutral treatment of debt for development or debt for nature swaps if they are done as part of refinancing in ordinary course and not as part of a restructuring of unsustainable debt loads. And finally, we recently included loss severity considerations in our sovereign ratings, allowing us to adjust the rating for better than average recovery expectations at default, which will make it easier to include different forms of credit enhancement for those sovereigns at the lower end of the scale. I want to thank you again for the opportunity to express our views and I'll yield back to the moderator.


DESA · Director, FSDO · Shari Spiegel [37:23]:

Thank you for sharing what Fitch is doing and thinking about some on some of these issues.

I'm now going to go to the IMF, to Mr. Plament. Losefo. Sorry, who's on the screen, I believe. Oh, who's here? Oh, welcome.

I said hello to you already, so thanks. He's the Deputy Division Chief, Debt Policy Division from the imf. And for you, how does the IMF approach and use debt sustainability analysis in your work? And what are the common points and differences with credit rating agencies methodologies and is there scope to better support long term investment horizon decisions since you are not so tied to the market? Yeah.


IMF · Deputy Division Chief, Debt Policy Division · Plamen [38:04]:

No. Thank you very much. Thank you, Director Spiegel. Thank you, Excellencies and distinguished delegates. So I'll talk about the Debt Stability framework for low income countries that is jointly developed between the IMF and the World bank and is also used by the two institutions.

The debt stability analysis is a key tool in funds work as promoting macroeconomic and financial stability entails avoiding public debt stress and maintaining debt sustainability. The IMF uses two different frameworks to assess debt sustainability, one for countries with market access and another one for low income countries that mostly rely on IMF and World bank concessional financing. As I mentioned in the beginning, I'll talk about the debt stability framework for low income countries that is also known as the leak dsf. So the debt stability analysis seeks to identify borrowing plans that can be sustained without experiencing debt service difficulties or resorting to exceptional financing such as debtor scheduling or accumulation of arrears, which can be very disruptive to the borrower economies. The analysis is informed by debt burden indicators that compare the stock of debt and debt service to measures of repayment capacity which are well known such as gdp, exports and fiscal revenue.

The capacity of countries to carry debt depends on the strength of their policies and institutions as well as the dynamism and resilience of their economies. In the framework, countries are classified by debt carrying capacity into three groups based on their relative ranking on a composite indicator that captures these factors. Mechanical signals. Risk signals are generated by comparing forecasts of these debt burden indicators to thresholds differentiated by debt carrying capacity and the final risk ratings combine the mechanical signals and structured application of judgment to reflect country specific factors. So, with all this background, how does this approach compare with the credit rating agency methodologies?

The close engagement with credit rating agencies at the Global Sovereign Debt Roundtable has contributed to common understanding in key areas. I very much look forward to the additional insights from today's panel, but I believe that the methodologies of the credit rating agencies and the IMF share a number of common features. These include the reliance on the debt burden indicators and controls for countries, economic dynamism and resilience, as well as the strength of their policy and their institutions, as well as the importance of judgment in the final assessment. At the same time, the League DSF puts emphasis on ensuring that policies to safeguard debt sustainability are politically and economically feasible and preserve growth at a satisfactory level to make adequate progress toward development goals. This helps bring in long term considerations in the assessment, which is one of the topics of the panel.

The League GSF also takes to account these long term considerations in how we measure the debt carrying capacity and debt burden. First, the composite indicator combines historical data with forecast of macroeconomic indicators anchoring the debt carrying capacity in part on longer term economic prospects. And second, the long term nature of borrowing for development is captured by how we measure the burden of external debt, which is measured by its present rather than its face value. And what do we mean by that? When the loans are provided at below market interest rates and benefit from long maturities or grace periods, their present value is lower than their face value, allowing countries to invest more in development that has longer term payoffs.

So to sum up the destinationability analysis carried out by the IMF take into account both long term economic prospects and the long term nature of the borrowing for development.


DESA · Director, FSDO · Shari Spiegel [42:09]:

Thank you, thank you so much for your comments and thoughts and how the IMF is doing the DSF and the debt sustainability analysis. I'm now going to go now to the screen so to get that correct. To Ugo Panica, professor of Economics, Department Head and Pictet Chair in Finance and Development at the Geneva Graduate Institute and thank you Ugo for joining us. So hopefully we will be able to see you on screen in a minute.

You recently published a study where you examined counterfactual debt levels in 17 countries under the assumption of a lower cost of capital. What did working on this and other analyses help you understand about capturing long term financial and debt risks? And what conclusions does this lead you to about on sovereign ratings methodologies and debt sustainability analyses? Methodologies. So Hugo, I hope you're here and over to you.


Geneva Graduate Institute · Professor (Pictet Chair), Dept. Head · Ugo Panizza [43:06]:

Yes, thank you very much. Shari, can you hear me?


DESA · Director, FSDO · Shari Spiegel [43:08]:

Yes, we can hear you Ugo.


Geneva Graduate Institute · Professor (Pictet Chair), Dept. Head · Ugo Panizza [43:10]:

Okay, fantastic. Thank you very much for the invitation.

I'M in Geneva, which is the other, you know, Yuhen headquarters. So it's evening here. So let me start with just a brief introduction. I'm going to say something very trivial, but I think it's important it has to be said. And then I'll go to the paper that you kindly mentioned, Sherry.

So the job of credit rating agencies is to, when they rate sovereigns is to provide opinions on sovereign credit worthiness. So basically the likelihood that a government will repay in full and in time. So the trivial thing that I want to say is that clearly there is a correlation and I want to emphasize the word correlation between ratings and the interest rate or the borrowing cost of the countries. Now this is a correlation. It's not necessarily a causal effect.

So it's a little bit like having a doctor that make a diagnosis is not responsible for the disease. In academic circles there is a lot of research of whether there is a causal effect. That is if it a downgrade or an upgrade affects borrowing cost. There is no full agreement among economists on whether this causal effect exists. The agreement however is that if it exists, it's small, it's not very large.

So that's. I wanted to make this trivial point and the second trivial point that has been emphasized by other speaker before, both by Bart Osterweld and by Lapo, is that it's indeed the case that sovereign credit, the credit rating agency focus on short to medium term horizon. But in a sense this is what the market wants. So in a sense that they are providing the information that are in demand from the market. So that's just a little bit of a premise, but.

So what is the paper that Shari asked me to talk about? So in this paper I do maybe if I want to put it in the John Lennon version is like I imagine a world without sovereign spread. And the idea is the following. You can have two types of debt crisis. You can have debt crises which are linked to fundamental problems, so simply the country cannot repay.

Or you can have debt crises that are driven by what economists call multiple equilibria. That is people think that the country cannot pay. People think that the country will go into trouble. Since they think that the country will go into trouble, they ask a high interest rate. And since people ask a high interest rate, then the country cannot pay.

So in this sense it's kind of a self fulfilling prophecy. The country goes into default simply because people think am I going to default? And distinguishing this fundamental crisis from these crisis where the country really cannot pay, from crises which are driven by Expectations, it's very hard. And so what I did, I kind of looked at the very long run. So I looked at a period of 50 years.

So this is as long term as you can get and kind of rebuild the debt levels and the borrowing cost of 17 emerging economies. So from 1970 to 2020. So this is the 50 year period I consider under the assumption that these countries can borrow exactly at the same interest rate and the same condition as the US So this is the imagine there is no spread idea. And then compare what would be the the counterfactual level of debt of these countries after these 50 years. Compare under this assumption that they can borrow like the US with the actual level of debt.

Now if I find that the level of debt, if they could borrow like the US is actually lower than the observed level of debt even though these countries have defaulted over time at all these problems, then one could conclude that these countries went into crisis not because there was a problem with the country but because there was these self fulfilling prophecies. And what do I find? I find that for 15 out of the 17 emerging economies actually the counterfactual level of debt would be lower than what we observed now. So it is indeed the case that not for every country, but for many of these countries the crisis was driven by simply the fact that the market expected that the crisis would happen. They asked for a higher interest rate and the crisis happened.

So there is an issue that the market kind of my focus on these short term issues that then lead to crisis. So that's what I find in this paper. So what are the implications of this? That maybe we need better financial architecture. We need a better international financial architecture that could rule out this self fulfilling crisis.

So this is not really the fault of the credit rating agencies. The credit rating agencies operate in the world that we have. If we had a different world that rules out this self fulfilling crisis, maybe the credit rating agency should focus on something else. So I'm going to take one more minute, Shari, and then I'll close. I don't know if I went over time or not, but.

So how could you imagine this better world? Well, this better world in which you self fulfilling crisis is a world in which you have more and better information about sources of vulnerability and a world in which you have a system, a better working lender of last resort. I think that the current system is not terrible, but it could be improved. If we could have a system that can rule out this self fulfilling crisis, maybe we could transition into this world where we could More focus on long term rather than focus on short term crisis. In terms of transparencies, there are many things that we don't know.

I'm going to conclude with a piece of advertisement. Think about the case of Africa. If you want to know, if you want to have detailed information about the structure, composition, the detailed composition of African debt or of debt of any emerging market countries, these data are very, very hard to get. And so with a bunch of co authors we try to address this problem. We built the African Debt database which for the first time presents instrument level information on basically all the debt issued by all the countries in Africa, both North Africa and Sub Saharan Africa.

I think this was a major improvement in debt data transparency and this is something that we did five academics with no money, no mandate, a budget of $100,000. So if we did this, I think the international financial system can do something to greatly improve data availability. The transparency. And that would be a step, would not be the only thing in order to make the system more predictable and reduce the likelihood of observing this self fulfilling crisis which according to my study are actually the majority of the financial crisis that we observe in the real world. And what makes this long term assessment of debt sustainability very difficult because you know, maybe you're sustainable in the long term, but then if you have a, if at some point financing dries out and you cannot roll over your debt, well, there's not much you can do about it here.


DESA · Director, FSDO · Shari Spiegel [52:39]:

Thank you. And in a perfect world where markets work well, somebody would be willing to lend. But because maybe because markets are not looking at that and they're keeping short term oriented, they're not willing to lend as much in those crises when a country needs for the short term to the long term. I'm going to go now to Mr. Stephen M. Liberator, the Head of ESG Impact and Global Fixed Income at Nuveen. And from the perspective of a long term institutional investor, what specific data, analytical frameworks and methodological enhancements are most needed from credit rating agencies to better support investment decisions about developing countries?


Nuveen · Head, ESG Impact & Global Fixed Income · Stephen M. Liberatore [53:17]:

And how would an institutional investor such as Naveen use scenario based analysis of creditworthiness or ESG integration? Thank you. Thank you Mr. Ambassador. Thank you Director Spigo and distinguished delegates for having me.

I think generally speaking, when we evaluate securities for our portfolios and we are a long term total return active investor, we are really looking for exactly what has been mentioned before about short term stability of ratings and performance. But I think more importantly what we're really looking for as a longer term Investor is what is the strategic intent of the issuers? And I think that the rating agencies do a very good job of what I would call doing the tactical work of evaluating data and debt metrics and current positioning on a variety of different factors. The one thing that we don't get conveyed to as an investor is really more the strategic intent that the issuers are conveying during those conversations with, with the rating agencies. One of the things that we pride ourselves on is doing a lot of due diligence and doing a lot of work, especially on more complex structures like blended finance, debt for nature swaps or debt for, you know, debt conversions, outcome bonds.

But at the end of the day, no matter how much work we do and diligence that we put into an evaluation, the rated agencies are always going to have better access, more access and more in depth access to those issuers. So what we would really look for is is there a way to convey to investors strategically what are they hearing from the issuers? We can look at the metrics and we can do that analysis ourselves. And we already do incorporate various forms of scenario analysis in all of our, all of our investments that we make. But what we're missing, I think is the strategic intent behind how issuers are approaching debt, how they're approaching development, how they're looking at the utilization of debt to create investment and to create growth in the future that will allow them to move beyond their current debt position into one that is more sustainable and stronger in the long run.

And so I think there is an opportunity there for more of that information to be shared. And I think that would allow for investors to truly become more longer term focused. Because, because if we don't have the ideas behind, well, we've spoken to an issuer and yes, they currently have a debt problem or currently are struggling with some debt, but their strategy behind it is extremely sound. We can't really look through the longer term to be able to make that determination or make an investment decision in the short term. And I think that when we look at the various approaches that are taken, one other area that we spend a lot of time on is truly development finance.

And one of the areas there, I think that would be beneficial would be a continued enhancement of the MDBs and any type of rating credit support that is being provided to say, a blended finance structure in order to provide the ability for those entities to really help to lever their own balance sheets in a positive way, to scale in more private capital to bring more of these projects to market. One of the things that we hear a lot when we speak to issuers and investment banks is that there is a lack of capital available from a credit enhancement standpoint to maybe make more, more challenging investments available to the private markets. And so sometimes we need that additional credit enhancement. And those agencies and entities are extremely well positioned to provide not just the financial support but, but also the educational and technical support behind helping us to evaluate what matters and what doesn't matter in a particular type of transaction and give us contact with and understanding of the real minutiae and the factors behind whether or not a particular project or a particular investment is really supported in that particular country. And so I think that there's another opportunity there from, from the perspective of potentially looking at the development banks, as some of the rating agencies have started to do more from a true development standpoint and allowing for potential growth in the ability for them to provide capital in a way that scales their own balance sheet, which will scale in more private capital over time.


DESA · Director, FSDO · Shari Spiegel [57:46]:

Thank you. So I think that there are a thank you to all the speakers for your very insightful comments and very useful I think for this audience as well. I think there are two sets of issues that we are hitting upon. One is the long term question and then the other is this instrument question as well, the MDBs. Actually one is MDBs.

And then there's also an instrument question when there's credit enhancement and credit support or debt swaps. How is that all taken into account as well? But let's start maybe for the second round to focus a little bit on unpacking the question of the long term question a little bit more. So we heard from Ugo this question of the self fulfilling prophecy that if there's a perception that if investors, and we know they're not, are thinking long term and if they're only thinking short term, then and if there's investments that may be important to long term growth, but they're seeing, seen as destabilizing the short term fiscal ability, then the rating agencies bring that into their thinking and the markets charge more for that. And that means that that can lead to a self fulfilling prophecy.

But at the same time, if there was a way to signal that that was where that money's going. So if the interest rate, if the future growth of a country is higher than the interest rate, then you're able, then debt has a positive impact. And so how do we sort of bridge that gap I guess is the question of thinking about the long term impact. So that a country, and we heard from the long term investor that you are looking for that sort of guidance as well. So maybe we can go back to the rating agencies first.

Actually, I know BART has to leave a little early, so maybe we'll go back to you and to sort of respond to some of the things that you've heard, understanding that the markets on the surface are looking for short term and many are. I used to be a fixed income manager, so I know this very well. But at the same time the asset owners maybe really want to see a longer term perspective to be able to how do we bridge this gap? Yes, thank you. And I really appreciated the points that have been raised.


Fitch Ratings · Chief Criteria Officer · Bart Oosterveld [1:00:08]:

Maybe I'll start with the last point on the multilateral development banks because I know there's an active global policy dialogue about what more can be done with those balance sheets. And we have tried to be very responsive in our research about rating headroom, about balance sheet capacity at the different multilateral development banks. And I would encourage everyone to look, look at that research which is also available in the public domain.

I really like the point on strategic intent. I have to say, and I'm going to risk sounding cynical.

Long term, good strategic intent is very boring. Right. And it's usually associated with highly rated entities. And I'm not just talking sovereign issuers, but corporates, banks.

In my 20 plus years of doing this work, issuers that are headed towards default talk an amazing strategic game.

Their long term vision is always really compelling.

And so distinguishing the entity that is really going to get through the rough path that is clearly ahead of them because it's on the front page of the Financial Times from the entity that is just saying the right things at the right time to try to calm down the markets. That is really hard. And it doesn't really matter whether that's a government or a company or a bank. So. And when it is a particular and clear strength of an issuer, you will see it in our research and it'll look quite boring, I'm afraid.


Speaker 16 [1:02:02]:

Thank you. So well, let's go to S and P and hear your thoughts on some of this.


S&P · Head, Center of Excellence for Methodology · Lapo Guadagnolo [1:02:07]:

Yeah. So I'll probably take a step back for a second and say so clearly we provide the ratings, right. And you know, there is a lot that the ratings conveyors information which is by the way, by definition is a system of ranking.

Okay. It's not necessarily something that tells you something is going to default with certain PD or not. It's a ranking and that sometimes is lost. But more importantly, we give a rating, but we also give the narrative that is behind it. And we always spend a lot of time to say to investors, you need to read the narrative that is behind that rating for two in Puerto Rico.

First of all, because two similar ratings can have a completely different narrative of why they are at the same rating. So they might have the same rating, but they have different narratives. And if you're an investor who care about that part of the narrative of another one, you might draw a different conclusion than another investor. Secondly, a rating, as we all know, it's one rating. I'm talking about the, you know, not the short term rating, but the long term rating.

And that speaks to all investors. And you know, company tends to have short term debt, medium term debt and long term debt have different investors care of different type of tenors. So it's almost for us, it's by definition that, you know, going back to the self fulfilling prophecy thing. Yes. If we were to see an issuer that might have long term stability because it's potentially in a good business, in a good area, as not much of a, you know, headwind in the long run, but seems to be facing problems now, our rating has to take that into consideration because there will be debt that is coming due in the short term and there are investors that want to know what the short term is.

So my point, go back to the beginning is you need to read what the narrative is. And we tried our utmost not to just give a rating, but also say this is the rating. But these are all the considerations that we have done in terms of short term, long term, medium term, from the economic point of view, from the competition point of view, from the financial point of view. And that's how we try to tell the story. The fact that then spreading the market sometimes be differently.

This is something that as professor said before, it is well known, but it works in both ways. So we have also seen periods which you probably all remember 10 or 15 years ago that countries like Portugal, Greece were funding in the market at same spreads, if not better than the United States. So the spreads that they're telling us was telling us what the spread was telling us that according to the spread, those countries were as credit worthies in the United States. In our long term view, we were making a big differentiation between the two ratings because again our narrative was different. And then we don't know what happened 10 or 15 years ago.

So investors need to be very careful of taking both information into consideration. The rating says something which is the narrative behind it. And the spreads is a condition of what market supply and Demand is and where investors are interested more in one part of the term curve or not.


DESA · Director, FSDO · Shari Spiegel [1:05:21]:

Thank you. So yeah, and the market of course is bringing in liquidity, global liquidity issues, all sorts of issues that are additional to in many ways though the rating can affect them also.

That can affect the rating also. But maybe I'll go to the IMF because so in one of the issues that, so when I was investing we used to run models of where we would under different scenarios run simulations as to how, how countries would, what would different shocks and different scenarios and different GDP forecasts do to a country's ability to repay its debt and then look at what the trajectory of debt would look like under those different scenarios and maybe we could run 500 simulations even. And one of the questions of course in all of that is the interest rate that countries have to are paying in those models to repay their debt. And that gets very much to Ugo's paper because the different interest rates you put in, the different refinancing costs can lead to very different outcomes. And so one of the things that we could sometimes do was to say let's run this with a U.S. treasury rate and now run it with the market rate and see what the difference would mean for the trajectory of that country's debt going forward.

Forward. And I'm wondering, you know, as you talk about the IMF and you're using in the DSA models, how you think about some of these issues.


IMF · Deputy Division Chief, Debt Policy Division · Plamen [1:06:58]:

No, thank you very much. I enjoyed with great, I listened to great interest to Professor Paniza and the points that he made about self fulfilling prophecies and then the importance of debt transparency and generally more information about debt structure. Structure and I think a lot of the drivers of the risk premia that differentiates the US treasury rate from the rates that sovereign issuers are facing in low income countries relates to this difficulty of investors to differentiate between countries and these countries very different and actually they become even more different over time. Some of the countries start resembling more and more frontier emerging markets. Other countries continue to rely mostly on concessional financing.

So it's very difficult with one model to try to capture all of them into a system of ratings. So actually I just wanted to say that we are currently reviewing the destability framework for low income countries and focusing exactly on this issue about heterogeneity between the fragile states versus the frontier ones. And then when we backtested the framework we identified some areas for improvement which actually relate to this issue about the interest rate and basically the risk premium that the countries pay. So one issue that we kept hearing is that in our framework a lot of low income countries rated at high risk or in debt distress without clear differentiation of the type of risks and time horizons that they are facing. So in the current review we are considering introducing granularity of the high risk rating.

So even though the high risk rating will remain the same, we will introduce some a snapshot that will help investors and other users differentiate between time horizon, at what horizon the stress may occur and also the type of risk that is involved, whether solvency or liquidity. I think that may go some way toward reducing this risk. Premier. And then I'll just mention one other point is that we're thinking about introducing a tool that would help capture the quality, comprehensiveness and transparency of debt data because we don't want to penalize countries that are more transparent and by being transparent they reveal more of their debt obligations and then they're subjected to bigger, to bigger breaches of thresholds. So we are using information from the World bank debt transparency heat map alongside some information from the GSAs about the reliability of the dead data in terms of the way the data is reported in the GSAs.

If it's frequently revised for historical data that would mean some inherent weakness in the data in the debt collection or some debt surprises and that should be taken into consideration in the Oval assessment. And then the complication is has to do with the coverage of the, of the data which currently is reported in the dsa. But it's very difficult to compare countries to have cross country analysis. So by bringing this up more explicitly I think that should help reduce the risk premia and to help investors differentiate more across countries. Thank you.


DESA · Director, FSDO · Shari Spiegel [1:10:39]:

Thank you. And that should definitely help could help reduce the risk. Premier. It's you know we used to have an uncertainty premia that would go on for when you didn't have a good amount, good sufficient data. The problem is sometimes you don't know when you have sufficient data versus others where you think you have sufficient data and you're wrong, which certainly happens many times.

So to be able to clarify that would be very helpful. I'm going to now go back over to Stefan. So just as a long term investor and hearing this discussion, what are your thoughts on some of these issues? Again it's like this question really we're trying to distinguish between how does one tell between a liquidity crisis and a solvency crisis and is there a way to be able to figure that out so that we can, so that a long term view could Be this bridge between the short term and long term. Yeah.


Nuveen · Head, ESG Impact & Global Fixed Income · Stephen M. Liberatore [1:11:36]:

And it's really a difficult situation because one of the things that we have found, you know, every investor is going to tell you their long term focus, almost none are. And so that's why we've kind of gone down this path of, you know, being so sensitive to, you know, daily moves in markets or daily changes and perceptions of liquidity. And why the rating agencies are so important is that they do provide that independent third party view of, of the credit quality of an issuer. Of course it is just an opinion. Right.

We don't take the rating agency's views and utilize that as our sole determinant of an investment decision. It's just an opinion which carries more or less weight depending upon, you know, the work that we're doing when we're evaluating a particular investment. So I think that the additional clarification and continued enhancement to transparency and disclosure around the types of information are being shared and as I said earlier, more strategic view on, you know, what is the, the approach that is being taken by this government and fully agree that, you know, every entity that's defaulted has a tremendous idea of how they're going to approach things strategically. But you know, it's kind of our job to be able to kind of sort through all of that. And I think that's where kind of the additional disclosure, additional transparency provides for us the ability to make that determination and again gives us a better sense of where the results are coming from.

So whether it's additional understandings of the narratives that are behind a particular rating, but also, you know, who is being spoken to, what is their particular role, how does that weigh, you know, within the overall evaluation. I think the only way we start moving towards things being longer term focused is if we all start thinking about things in a longer term focus. And it kind of starts, I think with, and I will totally agree that most issues in the financial world are the buy side's fault because we don't either push hard enough or we just accept what's being told to us. When it's really our job to be able to reach out and drive these discussions to a point where we can deploy our investors capital in the most efficient, effective way, which if we're doing it correctly then is going to lead to issuers being able to deploy their capital in a way that's most effective and in the case of a sovereign entity, one that's most beneficial to their citizens. And I think that's ultimately the goal that we should be looking at when we're trying to evaluate these particular transactions.


DESA · Director, FSDO · Shari Spiegel [1:14:08]:

Thank you so much. So I think right now I'm going to hand it back to the ECOSAC Vice president to moderate the interactive discussion dialogue.


ECOSOC · Vice-President [1:14:20]:

I thank the moderator for conducting the panel and the presenters for their substantive contributions to the discussion. I now invite delegations to engage the presenters in an interactive. To go to Ugo to see if Ugo wants to. So Ugo, do you want to. Do you have any comments for your thoughts on what you've heard?


Geneva Graduate Institute · Professor (Pictet Chair), Dept. Head · Ugo Panizza [1:14:40]:

Yes, please. Thank you. Let me start from what you said, Shari. You said something very important after I stopped speaking. You said if market worked well somebody would come in and you would not have this self fulfilling crisis.

This is true. But Keynes once said that the market can stay rational longer, you can stay liquid. But look, if you look at the literature on banking crisis, there's the same issue and they're the solution. You know, there is the famous diamond DIPVIC model and the solution is there is to have a lender of last resort. So, and that's when I said if we would have a better international financial architecture, a better working international lender of last resort, you know, that would be a way forward.

Clearly it's, you know, it's difficult, it's not easy, you know, you know, it's, we know that it's difficult with banks, with countries more difficult. You cannot take assets, everything is more complicated. And so, so, but you know, maybe that's one way forward. I'm going to take 30 more seconds and say something more provocative. But it's a concrete proposal to improve transparency, which I think it's very important.

Imagine a world in which all the debt which is not reported is non enforceable. This would create massive incentives. I'm an economist, I believe incentive. This would create massive incentive for transparency and would reduce the borrowing costs of more transparent countries because would be the only countries for which all that would be enforceable. So let me put it there.


DESA · Director, FSDO · Shari Spiegel [1:16:28]:

It's even more of an incentive than the uncertainty premium or putting a premium on not. Yeah. Oh, so now vice president back over to you. Very well. Now I invite delegations to engage the presenters.


ECOSOC · Vice-President [1:16:45]:

A request for the floor should be made by pressing the microphone button. The time limit is five minutes for statements on behalf of groups and three minutes for individual interventions. And there will be muting of microphones for exceeding statements. In order to enable interpreters to do the best job possible. Please deliver your statements at a normal speaking speed.


Palau · AOSIS [1:17:12]:

So I start with Palau on behalf of Eosis to be followed by Spain. You have the floor Chair. I have the honor to deliver the following statement on behalf of the alliance of Small Island States. AOSIS Current credit rating methodologies remain heavily short term in focus, prioritizing near term fiscal and macroeconomic indicators. While these metrics are important, they fail to capture the long term systemic risks and resilience building efforts that are critical to small island developing States.

Ratings today are largely anchored in near term fiscal and macroeconomic indicators. However, climate change, sea level rise and increasingly intense disasters shape our economies over decades, not quarters. But what is also striking is how these impacts are reflected in credit ratings. In addition to the example earlier of Grenada, in Papua New Guinea, a severe drought in 2015 led to a steady decline in its rating despite relatively stable economic outlook. Speaking before the shock.

In fact, from 2000 to 2022 the average credit rating for the 13 seats fell over 3 points. These examples point in point to a clear conclusion. Current method methodologies are capturing the shock but not capturing resilience, recovery or long term potential. For this reason, AOC calls for a shift toward longer term forward looking nuanced credit assessments. First, we need the integration of scenario based analysis and stress testing, particularly for climate risk ratings should also assess how economies perform not only under current conditions but under plausible future scenarios.

A more holistic evaluation of national wealth, natural and human capital as strategic assets alongside economic indicators can paint a fuller picture. Secondly, we must also recognize resilience investments as strengthening credit worthiness. There is sufficient evidence that investments in resilience such as climate adaptation, renewable energy and disaster risk reduction can generate significant long term returns. For instance, renewable energy investments can generate three to eight times their economic value. In the Pacific, marine resources can sustainably generate immense economic growth and and support livelihoods.

When these dimensions are properly accounted for, the picture changes significantly. Analysis shows that incorporating resilience investment into credit assessments could increase average seats ratings with corresponding improvements in growth prospects. Therefore, if credit ratings are to guide investment effectively in today's world, they must evolve. They must move beyond a narrow short term lens and reflect the full trajectory of risk, resilience and development potential. If we are to mobilize long term investment at scale, credit assessments must evolve to reflect both risk and resilience over time.


ECOSOC · Vice-President [1:20:24]:

It is essential that the system recognizes and support long term sustainability. I thank you. I thank the distinguished representative of Palau. I now give the floor to the distinguished representative of Spain to followed by Dominican Republic and China.


Spain [1:20:44]:

Thank you very much President Excellencies. Thank you very much for convening this first special ECOSOC meeting on credit rating agencies in fulfillment of the civil commitment. We particularly like to thank the panelists. They made some very interesting introductions with complementary points and really explaining ways in which we can work in a more constructive way to make progress on this very important subject. I'll try to respond to the questions that you put during the panel.

And the first is that Spain feels that we do need to continue to adapt the methodologies of the credit agencies to a world in constant flux. As was pointed out in the report of the Interagency UN Group on Funding Financing for Development 2025, we would encourage the agencies to strengthen the scenario analysis and stress testing to more systematically integrate risk and resilience factors, including those related to climate. And one of the agencies referred to that point, which we think is very important. And with regard to the second question on information necessary for investors in the long term, well, we agree it's fundamental to improve the quality, availability and coherence of the data. And that is included in paragraph 55 as well of the Seville commitment.

This, we feel, means that we need to improve national statistical systems, include transparency with regard to the agency and have a more integrated and reliable ecosystem of data. We welcome all of the progress that has been made since 2020 25, and we think that we can and should do more, particularly having a more institutionalised, structured dialogue between countries and agencies over and above the qualifying cycles. Then, with regard to the use of information by investors, we think it's very important to reduce automatic reliance on credit ratings by promoting a more complementary use of other sources, sources of analysis. And finally, we'd like to welcome emerging initiatives that can enrich the qualification system, particularly proposals relating to creating an African credit rating agency.


ECOSOC · Vice-President [1:23:07]:

Thank you very much, distinguished representative of Spain.

I now give the floor to the distinguished representative of Dominican Republic, to be followed by China and the third world network.


Dominican Republic [1:23:21]:

Thank you, Mr. President. We align with the statement made by Palau on behalf of aoc. So we have heard that there are efforts being made to incorporating forward looking tools alongside sustainability factors and this would allow ratings to more accurately reflect the realities of countries rather than systematically penalize them. We commend this and look forward to seeing how these materialize for long term institutional investors. Better risk assessment depends on access to transparent, high quality and forward looking data.

We understand that beyond traditional indicators, investors require deeper insights into policy credibility, institutional strength, long term development strategies and exposure to systemic risks. So strengthening national statistical systems is essential, particularly for countries with capacity constraints, to improve the accuracy of the information that ultimately shapes investor decision making. So, in the context of revisiting methodologies for tailored ratings, we would like to ask the following questions. What collaborations or platforms are credit rating agencies leveraging to improve alignment between their assessments and domestic data frameworks? What do you think should be addressed in capacity building initiatives to better equip countries to produce high quality data that informs credit ratings?

And how are you ensuring that credit rating methodologies are aligned with national statistical systems but also with long term development plans so that so as not to reinforce structural biases. Thank you.


ECOSOC · Vice-President [1:25:10]:

I thank the distinguished representative of Dominican Republic. I now give the floor to the distinguished representative of China, to be followed by the Third World Network and Paraguay.


China [1:25:24]:

Thank you, President. I'd like to thank experts and also representatives of different institutions for sharing with us your insights on adopting a longer term horizon in ratings and assessments. China supports further improving the technical architecture of credit ratings and strengthening the analysis and disclosure of the long term economic resilience of rated entities, thereby enhancing the predictive value of rating information. In light of the characteristics of developing countries and emerging enterprises, we should move beyond conventional assessment approaches centered on assets and scale and develop dedicated methodologies and rating symbols that are more forward looking and show greater differentiation. Thank you, President.


Third World Network [1:26:38]:

We don't hear you. It's Mike for the Third World Network for Civil Society 1. Okay, great. Dear Excellencies, Member States, experts and colleagues, methodological concerns on credit rating agencies are not new. Empirical analysis illustrates that GDP per capita, not solvency indicators are the strongest predictor of sovereign ratings based on short term trajectories often limited to five or fewer years.

This has been amply discussed in this panel and it is not surprising therefore, that low income countries receive higher costs of capital regardless of investment quality or long term growth potential. Countries with high inflation have lower ratings in spite of a global context where where imported inflation through exogenous shocks is rife, including in the current moment. Meanwhile, the debt to GDP ratio has not been found to be statistically significant, reflecting the fact that many high income countries are accorded AAA ratings despite debt to GDP ratios well above 100%. We have heard of the conflict of interest that is generated by the issuer pays model where rating agencies deliver rating judgments to the very financial clients who pay them for for assessments. Consequently, rating agencies have been criticized to be incentivized to promote the policies that maximize client profits and market share.

The conflict of interest dilemma has raised viable questions on the objectivity, accountability and transparency in the practice of rating agencies by even the most basic standards There is also the Climate Vulnerability Index. While many nations have been downgraded immediately after climate disaster, exactly when concessional finance is needed urgently, the index points to climate vulnerability alone, regardless of adaptation and resilience investments on a long term basis being a risk criterion. We would like to highlight that there is a need for greater plurality of agencies and in this respect, in alignment with Brazil's statement earlier today morning, the establishment of a multi multilateral credit rating agency is a viable proposal. In addition to supporting the newly established African credit rating agency, a multilateral credit rating agency could address the current shortcomings and center the criticality of ratings to development financing in the context of debt distress, SDG achievement and climate change. There are two ways forward one.

First, to improve and stabilize credit risk assessments of sovereigns by lengthening time horizons to approximately 20 to 30 years, allowing for rating through the cycle in order to withstand cyclical fluctuations, reduce noise and generate greater stability by better aligning with long term investor needs as well as long term sovereign.


ECOSOC · Vice-President [1:29:42]:

I thank the distinguished representative of the Third World Network. I now give the floor to the distinguished representative of Paraguay, to be followed by South African Sweden.


Paraguay [1:29:58]:

Thank you very much, Mr. President. We thank you for convening this meeting and we also are grateful for the valuable contributions from the panelists. My delegation is speaking on the basis of our recent experience of a country that has achieved investment grade from two rating agencies, reflecting the growing confidence of the international financial system in our national economy, which has been growing alongside years of macroeconomic stability, fiscal discipline and the strengthening of our institutions. We value the role played by rating agencies in assessing and bringing visibility to countries by highlighting their strengths. However, our experience also allows us to identify areas where the methodologies that we use could be further developed.

In particular, Paraguay has over the last four years maintained an active dialogue with the agencies and we've had the opportunity to analyze their methodologies in greater depth. What we see is that in some cases, models rely heavily on standardized indicators, such as the World Bank's Worldwide Governance Indicators. While we recognise the usefulness of these indicators as a comparative reference, their inclusion in models has limitations because they do not always reflect progress in governance, institutional reforms and the strengthening of the rule of law. In our case, this has made it necessary to actively complement the available information through a technical and transparent dialogue with the agencies and presenting updated data and concrete progress in different areas of the state. In this constructive spirit, Paraguay would like to put forward two specific proposals.

First, to move towards greater inclusion of indicators that capture ongoing reforms and structural changes in real time complementing traditional metrics not only of governance but also of reforms that strengthen public finances and the organizational structure of the state, which in turn inform other pillars of evaluation within the methodologies and second, strengthen transparency and provide greater clarity regarding the criteria used, while promoting more structured spaces for technical dialogue with the countries being evaluated, including both the public and private sectors. This would help reinforce the predictability of the process and mutual trust. In conclusion, we encourage rating agencies to continue refining their methodologies and to promote closer engagement, particularly with public sectors that generate impact across the different evaluation pillars. This will strengthen the credibility of the system and achieve an analysis that is closer to the reality of each country, thereby facilitating better access to financing.


ECOSOC · Vice-President [1:32:44]:

Thank you representative of Paraguay.


South Africa [1:32:47]:

I now give the floor to the distinguished representative of South Africa, to be followed by Sweden and Philippines Philippines thank you Mr. President. We thank the briefers for their informative briefings and would like to make the following remarks in response to the question posed in the Concert paper. South Africa wishes to underline that credit rating methodologies must evolve to stay relevant in a world shaped by technology advancement, climate risk and rapid system in sharks. The world that the credit rating agencies assess now is fundamentally different from the one their traditional models were built for. Technology shaping economies and risk profiles of sovereigns.

Digital transformation, artificial intelligence and cyber infrastructure affect credit worthiness. Cyber attacks can disrupt revenues or government services. Also, technology adopts drives productivity and growth potential. Climate change has moved from a distant concern to an immediate credit factor. Physical risks like floods and droughts affect assets and fiscal stability.

In this regard, methodologies need to incorporate forward looking climate scenario analysis, not just historical data. Pandemics, geographical conflicts and financial shocks now occur more frequently and they spread faster. Therefore, credit ratings methodologies should better reflect sharp absorption capacity, policy flexibility and institutional responsiveness. While there is growing demand for environmental, social and governance aligned investment, the application of this criteria to sovereign remains uneven. Countries are often penalized for structural social challenges without sufficient recognition of reform efforts or historical constraints.

A more developmental and context specific approach to ESG assessment will benefit both investors and issuers by aligning investment flows with long term sustainability goals rather than short term risk aversion. While discretion is unavoidable, particularly when assessing political or institutional risk, rating agencies should be clearer about how such assessments influence final ratings. This will reduce perceptions of bias and improve credibility and transparency, especially among developing countries that often feel structurally disadvantaged by the current system. In closing, we wish to underline that credit ratings are useful baseline for assessing credit risk, but not as a substitute for deeper analysis. Investors should embed credit ratings within a broader analytical framework that includes their own macroeconomic analysis, analysis, scenario planning and qualitative assessment of country specific risk and opportunities.

This is particularly important in times of global stress when ratings may lag events or conversely amplify short term market sentiment. Drawing on expert opinion and local market insight can help investors form a more nuanced and forward looking view of risk. I thank you Mr. President.


Sweden [1:35:52]:

I thank the distinguished representative of South Africa. I now give the floor to the distinguished representative of Sweden, to be followed by Philippines and Children and Youth International. Thank you, Chair Excellencies, distinguished panelists and delegates. Sweden aligns itself with the statement to be delivered by the European Union. Let me begin by underscoring the value of this meeting as an opportunity to share lessons learned and experienced, exchange experiences and challenges.

This is essential to advancing the implementation of both the Sevilla Commitment and the Pact for the future. As many have mentioned, the integrity and independence of credit ratings are fundamental to their credibility. At the same time, they must be complemented by greater transparency and dialogue to ensure that ratings genuinely reflect economic realities, particularly for developing countries. Strengthening national data and statistical system is also central to achieving this. In this regard, Sweden welcomes the Global Emerging Markets Risk Database Consortium's decision to publish recovery rate data for the first time, along with historical performance data spanning several decades back.

Sweden has consistently encouraged this step and we are pleased to see that it's already yielding tangible results. This increased transparency not only provides investors with a much more accurate understanding of risk, it may also help expand private lending to developing countries. We also note that the release of this data has enabled credit rating agencies to refine how they quantify preferred creditor treatment in their capital models. These changes are expected to improve risk adjustment criteria for many multilateral lending institutions and could ultimately unlock hundreds of billions of dollars in additional sovereign lending capacity as we look ahead. So Sweden would appreciate further elaboration on how historical data can be more effectively used to improve the methodology of credit assessments in support of financing for sustainable development, particularly for developing countries.

Thank you.


ECOSOC · Vice-President [1:37:53]:

I thank the distinguished representative of Sweden. I now give the floor to the distinguished representative of the Philippines, to be followed by the Children and Youth International and Maldives.


Philippines [1:38:05]:

Thank you very much, Mr. Vice President. The outset, we wish to underscore the importance of this special meeting on credit ratings as one of the key outcomes of the Sevilla commitment that can help reform the international financial architecture. We also thank the panelists for their very insightful presentations and remarks. We hope that this can be sustained and lead to better understanding and more dialogue and, as one of the speakers mentioned earlier, more strategic and long term dialogue that can help improve the scale, speed and scope of investments in developing countries that need affordable capital the most. For cras indeed play critical and catalytical roles in financing for development.

In recognition of this, the Philippines actively engages credit ratings agencies to provide updates the on country's economic performance, reform priorities and fiscal outlook. The Philippines aims to to secure an A rating from at least one major credit rating agency by 2028 under its road to A agenda and we remain firmly committed to transparency, accountability and sustaining fiscal prudence while promoting economic growth and sustainable development. Having said this, we hope that cras will further adapt and evolve their methodologies to take into account the unpredictable nature of the current global economy and significant impacts of this on developing countries. Amid growing global risks, shocks and uncertainties, there is a need for longer term assessment of debt sustainability that will take into account factors beyond GDP and traditional macroeconomic indicators. As others here have mentioned, climate and nature risks increasingly shape a country's fiscal and development trajectory.

For countries like the Philippines, which face recurrent climate shocks and structural vulnerabilities common to many middle income countries as well, these considerations cannot be ignored. We therefore would like to ask the distinguished panelists, how is resilience being factored in credit rating agencies, methodologies and assessments? And how can climate vulnerable countries seek to improve their ratings? Thank you. I thank the distinguished representative of the Philippines.


Children and Youth International [1:40:29]:

I now give the floor to the distinguished representative of the Children and Youth International to be followed by Maldives and Portugal. Thank you, sir. I'm advocating speaking on behalf of the Financing for the Development Children and Youth constituency of the major group for children and youth. First, we highlight that the credit rating methodologies are not neutral. They are a set of choices about what matters, whose experience counts and how far into the future are we willing to see.

The current methodologies are falling short for young people, the Global south and the system at large. Second, we welcome the civil commitments call for rating agencies to lengthen their analytical time horizons. But we need to go further. The African Union has already moved by building the Africa Credit Rating Agency grounded in development realities. We should bid on this example.

Third, while investors can better use existing data, the methodologies themselves must evolve to reflect structural realities. We call for establishing a universal intergovernmental process under the auspices of ECOSOC to govern the credit rating process. Furthermore, the credit rating must incorporate environmental vulnerability, social investment returns, gender and intergenerational equity, and the specific context of countries seeking debt relief. Fourth, we also call for the explicit integration of future generations impact assessment in circumstances. Sovereign rating methodologies chair children and youth must not be considered as a mere demographic footnote in credit rating considerations.

They are the primary stakeholders and means of implementation for long term fiscal sustainability. A credit rating that ignores the youth dividend of public investment is an incomplete rating regardless of the location or institution that assigns such ratings. We thank you.


ECOSOC · Vice-President [1:42:31]:

I thank the Children and Youth International Representative and give the floor to the distinguished representative of Maldives, to be followed by Portugal and Thailand.


Maldives [1:42:45]:

Thank you, Mr. President. The issue I would like to raise concerns time. Sovereign rating methodologies operate in practice over a medium term horizon. This is appropriate for assessing fiscal dynamics, liquidity pressures and refinancing risk. It is suited to capturing the return profile of long term public investment, particularly in economies where such investment is fundamental rather than discretionary.

When the Maldives invest in connecting its capital to nearby islands so that a fragmented urban economy can function at greater scale in renewable energy to reduce structural dependence on imported fuel and airport infrastructure to reinforce a tourism sector that remains the engine of the economy, the cost is immediate and visible in our debt metrics. The gain comes more gradually in stronger connectivity, better use of limited land, greater energy security, higher economic output and long term productive capacity. This creates a structural asymmetry. In corporate credit analysis, capital expenditure is assessed along time, asset quality, expected returns and future cash flows. There is an established linkage between investment and value creation in sovereign analysis.

That linkage is far less developed. Investment is recognized for countries investing heavily in resilience and future capacities. This is not a marginal issue. It goes to the core of how risk is measured, periodic and ultimately perceived by markets. My question to the Panel is to what extent is the current treatment of long term public investment a deliberate methodological choice and what progress is made towards incorporating its risk reducing and growth enhancing effects more explicitly by systematically into a sovereign rating framework?

I thank you.


President [1:44:51]:

I thank the distinguished representative of Maldives. I now give the floor to the distinguished representative of Portugal, to be followed by Thailand and International Monetary Fund. The last speaker thank you.


Portugal [1:45:06]:

Thank you Mr. President for giving me the floor.

I would like to thank the panelists for their insightful inputs and to make the following three brief points on behalf of Portugal and contribution to the present discussion and follow up to the timely F54 mandate. First, Portugal believes sovereign assessments should become more evidence based and more forward looking. Current methodologies still rely heavily on short term microeconomic and fiscal indicators. But today's reality, as pointed out by many today, requires a broader lens, one that also captures longer term risks, resilience factors and the effects of structural reform. Second, we see clear value in making fuller use of the knowledge and data held by multilateral development banks, namely when cooperating amongst themselves as a system as foreseen by the G20 roadmap towards better, bigger and more effective MDBs.

MDBs have extensive long term experience in developing countries and a substantial evidence base on project performance, risk and repayment behavior. Better use of that information can help improve scenario analysis, reduce excessive subjectivity and support more accurate assessments. Third, and finally, Portugal welcomes continued reflection on how methodologies can evolve to better adapt to the changing worlds, including through more forward looking approaches and greater use of relevant long term evidence. This can help support more accurate assessments and a better informed investment environment for developing countries. I thank you.


President [1:46:29]:

I thank the distinguished representative of Portugal. I give the floor to the distinguished representative of Thailand, to be followed by the International Monetary Fund.


Thailand [1:46:40]:

Mr. President, Thailand recognizes the important role of credit rating agencies as key intermediaries in the global financial system, particularly in enhancing transparency, reducing information asymmetries and facilitating access to international capital markets. While recognizing their value in supporting market functioning, we emphasize the need to continuously improve how ratings are formulated and applied, particularly in an increasing, increasingly volatile and uncertain global environment. We therefore would like to share three points.

First, in line with the Sevilla Commitment, Thailand supports enhancing transparency in sovereign rating methodologies. We view that rating methodologies should be firmly based on clear, reliable and evidence based data, ensuring that assessments are consistent, transparent and reflective of country specific fundamentals. We see room for further improvement, for instance, the need to incorporate long term considerations such as economic resilience and structural transformation. Second, we recognize that credit ratings can have pro cyclical effects, hence amplifying financial pressures, especially in times of stress. We therefore encourage credit rating agencies to exercise caution on the timing of their ratings.

Third, Thailand sees the importance of having regular dialogues with credit rating agencies to provide context specific information and reduce potential misinterpretations of economic data development. In addition to the regular dialogues, we support deepening engagement with graded rating agencies including through structured knowledge sharing sessions with created rating agencies, analysts, collaborative workshops and Constant Information Exchange. Mr. President, Thailand welcomes a convening of this first special meeting on credit ratings as mandated by the Sevilla Commitment and looks forward to continual dialogues between the UN Member States and the credit rating agency with a view to enhancing methodologies to better reflect economic realities. I thank you.


Speaker 49 [1:48:39]:

I thank the distinguished representative of Thailand.


IMF [1:48:41]:

I give the floor to the distinguished representative of the International Monetary fund. Thank you, Mr. President. Since early 2024 there has been significant engagement with the three major credit rating agencies as part of the work on the Global Sovereign Debt Roundtable or GSDR. The GSDR is courtiered by the IMF, World bank and the G20 Presidency and comprises of official bilateral creditors, private creditors and debtor countries. These GSTR discussions help build common understandings on key areas where ratings can impact other countries and encourage closer information sharing.

We would encourage everyone to check out the latest GSTR compendium of understanding on technical issues for more details on these discussions. Mr. President, the CRA should be encouraged to ensure their methodologies remain up to date and that they take into account evolving insights and range of considerations that can impact credit risk. However, credit the CRAs are and should remain independent. As such they have full ownership of the decision of how to make their assessments. There are well established confidentiality processes to handle closer engagement and communication with the cras.

And countries that would like the like the cras to consider additional factors when assessing their credit risk could communicate more closely with the cras and try to persuade them to take those factors into account. There have been major improvements. There have been improvements in information sharing between the other countries and the cras but there is still scope for significant further improvements. And beyond closer communication on country specific issues, there are some cross cutting elements that apply to all countries. Multilateral Multilateral surveillance products by the IMF and other IFIs and MDBs can help inform the assessment of risks.

This includes the revisions to the IMF World Bank Low Income Countries Debt Sustainability framework or LIC DSF. But again the CRAs have ownership of the decision of what and how to incorporate these considerations into their assessments. Thank you.


DESA · Director, FSDO · Shari Spiegel [1:50:37]:

Thank you. We have heard from the last speaker in this discussion.

I now give the floor to the moderator to invite very brief responses from the panelists and to make closing remarks. Thank you so much and thanks for all of those very interesting comments and a lot of really good points and some questions. So I'm going to pass it back to the moderators including issues of transparency, investment in resilience and long term public investment. Questions on what should a vulnerable country do to raise its rating and the importance of dialogue amongst other many other points. So I'm going to pass it back to you again.


Moderator [1:51:11]:

We'll start with Bart and then go to.


Fitch Ratings · Chief Criteria Officer · Bart Oosterveld [1:51:14]:

Yeah, yeah, thank you. I'm afraid this is a lot of topics. Let me address three that I think cut across dramatically on a number of issues that were raised. So I think first the need for differentiation and nuance.

So Aside from our core ratings process, this product and let's leave the horizon aside. Several speakers, including the representative of Spain mentioned the importance of scenario analysis, which I fully agree with. If you look on our website now, we have a number of scenarios about the current state of conflict in the Middle East. Like what if oil prices stay elevated for X number of time at X prices? What impact does that have on a number of issuers?

The importance telling the credit story and the detail and the analysis. I think we are very committed to several speakers and too many to list, name the importance of the transparency of our approach and the approachability of our criteria and their ease of use, which is something we're highly committed to. And I agree with everyone who said that our frameworks need to continue to evolve to changing economic realities. So whether that be AI or GEO economic shifts or climate or the increased source of pandemics. And we are committed, like I said in my opening remarks, to continuous feedback to our criteria inside or outside of formal market consultations windows.

So that was theme number one, the second topic I wanted to pick up on. And I'll use the comments of the representative from Paraguay to do this. The importance of a frank and data driven dialogue between issuers and rating agencies I think is paramount.

And then finally, this is in response to comment of the representative from South Africa, but it also goes with something that my fellow panelist Steve mentioned earlier. Ratings are but part of an investment decision. That's how we intend them to be used as well. They're an input. We are also only part of a broader risk framework.

So whatever we say, the IMF has an opinion, banks and investors have their own credit and risk departments and they have opinions. And then the market prices risk in its own way that we may or may not agree with. And sometimes CDS is written against the bond and well, those fluctuate quite a bit more than our ratings do. And at times our assessment will be more benign and at times our assessment will be more severe. So we are part of a broader risk architecture and at best an input to investment decisions.

So with that, let me yield it back to the moderator. Thank you, Bart. And now to Lapo. Yeah, so thank you very much. I was taking coppice notes.


S&P · Head, Center of Excellence for Methodology · Lapo Guadagnolo [1:54:32]:

Can you hear me? Yeah, so I agree with Bart. So there's a lot in here. So I can say probably a couple of things. So first of all, we are very well aware that we live in the market, that you know, we are rating market and issuers and we have to make sure that we are staying on top of what the risks are and what the trends are.

And we actually do it, we do it constantly. We even put together now a few years ago, probably go six or seven years ago as a specific team which is called, you know, Sustainable Finance Team, which actually one of the only topic that they do is thinking about all the megatrends in particular, you know, the one linked to nature or to climate, to demographics, so on and so forth. We spend a lot of time in meetings like this one. I personally, I've been in a lot of the meetings like the one that was mentioned in Seville, in Madrid, London, New York, Washington, you name it. So we really value the fact that we get a lot of comments from the market participants.

I went through in my remarks to that just the four or five main changes that we have done in our criteria in the sovereign space just in the last couple of years. Exactly. Because we, we take into consideration all the data and all the information that we get and we want to make sure that our ranking power, which is what the rating is, is actually as strong as possible. I would say, look, I've heard people saying about the fact that there is not much of the long term view. I can assure you that there is a lot of long term view that is taken into consideration in our analysis.

But as many of you actually said, and also I said in my remarks, when you go more into the long term view, the visibility and the materiality or whatever the risk is in front of you becomes much more difficult to take into consideration. So that's why I thank you for probably heard in the first panel this morning. We have introduced a much more strong and constant activity of scenario analysis and what if analysis. Also if you look at our ratings, they always accompanied by what we call the outlook, even just the outlook statement gives you a sense of this is what we think the rating is based on the base case. But we believe these certain things were to occur, the rating could go up and down.

Clearly we cannot tell the, the countries what they can do or what they should do in order to improve their credit rating. That's clearly we cannot do. But we always believe that since we are so transparent in all the things that move our ratings, it's clear for a particular country X compared to a particular country Y. If you are giving more weight on that particular country for the financial situations or the, you know, natural disaster issues, so on and so forth. So please, as I said in my, at the beginning of my remarks, reading the narrative that is behind what our rating is, is, is very important.

And then, you know, let me, let me conclude by saying that if you look at the history of the sovereign ratings, it's not unusual, it does happen that there are ratings do change. And we had over the years rating of countries that were in the low speculative grade that went up being investment grade the same as the other way around. Countries that have been investment grade for a long period of time and they went to non investment grade even in periods that were necessarily spread on those countries were not really reflective of that long term view. So let me finish by saying that long term view is exactly what the ratings are about. But you must take into consideration also short term risks because as I said before in my remarks, countries pay any tenor.

And so you have to consideration, also take into consideration the fact whether a country is potentially facing a liquidity issue or a solvency issue. Because whether it's liquidity or solvency, medium term or short term or long term, they all contribute to what a default could be. And so we clearly have to take that into consideration. With that I yield back to the moderator. Thank you so much.


Geneva Graduate Institute · Professor (Pictet Chair), Dept. Head · Ugo Panizza [1:58:42]:

So now we're going to go back to Ugo.

Thank you. Shari. I'm not sure how to answer that. There were many comments and many valuable contribution. So it may be something that was said by.

I'm going to use a striking example of my own country. Well, I have two countries but this time I'm going to pick Italy.

What was said by somebody that credit rating are just one point of information and I think that's very, very important. So Italy has been rated triple B plus by S& P since, if I remember correctly, since the end of 2011.

In the end of 2011, the Italian spread I think was 500 basis point. Now I haven't looked it today, but it's probably 100 basis points. So there are huge amount of things that matter beyond rating. So maybe just I'm unable to respond other things. So I just want to bring this example, let's stop here.


Nuveen · Head, ESG Impact & Global Fixed Income · Stephen M. Liberatore [2:00:08]:

Thank you, Hugo. And finally to Stefan. Yeah, I think what we can continue to do from the buy side and the investor community is as a client of the rating agencies, including Fitch and S and P, is continue to work with them to let them know the things that we're looking for and continue to express the views of what we think is valuable and where we see potential for enhancement. But I would also say what we should be doing, and we attempt to do this as much as possible, is to engage directly with issuers. So one way to also address Maybe a perception of a gap in maybe the views of the issuer and of investors is to engage and speak with and work with investors more directly.

So when you do do your debt roadshows, ensuring that you're speaking to the issuer, speaking to investors directly, because that's another great opportunity for you to be able to express your views and where you see yourselves and be able to express your strategic intent as well as explain kind of your current tactical situation. And I think that direct interaction with investors is always highly valuable because it provides us the opportunity to hear it directly from you as an issuer. And I think that that is something that is maybe missed at times during the debt roadshow process. Thank you. Thank you.


IMF · Deputy Division Chief, Debt Policy Division · Plamen [2:01:31]:

And the final word will go to the imf, to Plamen.

Yeah, thank you very much. I listened with great interest at all interventions. And I just want to mention one thing that I think several of the speakers mentioned, that long term projections are actually very difficult to make. And the debt stability framework developed by the IMF and the World bank provides is a public good and we're trying to improve it with each iteration that we go through. So besides what I mentioned earlier, in terms of the enhancements that we are considering, one additional one is actually that we are planning to introduce a new long term module that will provide interface with qualitative tools for assessing the impact on public debt vulnerabilities of policy and investment decisions associated with development and other long term challenges, including the ones stemming from climate adaptation.

Of course, recognizing that these models are actually very complex, dynamic general equilibrium models, very difficult to fit into the standard framework for macroeconomic projections. But I think this is, this will be a start. At the start we will provide calibrations based on two models developed by the IMF and the World bank. But the interface would allow to plug in other models. So we do invite the international community to basically come up with these models of the investment growth nexus to engage in a dialogue both with IMF and the World bank, but also with credit agencies and other investors.

And then as the knowledge evolves, that will help build this common understanding about the impact of resilient investment and all the other things that were mentioned in this session. Thank you very much. Thank you so much and thanks to all of our speakers. As Bart mentioned, there are many, many comments and it's hard to sum it all up, but certainly a few points came out. One was clearly the issue of transparency that came out in both the morning session and the session.


DESA · Director, FSDO · Shari Spiegel [2:03:34]:

The second, in terms of long term focus, the importance of narratives, the strategic intent which gets to the point of dialogue and the importance of dialogue, which will be very linked to our next panel that we're about to go to in a few minutes on capacity development issues. But at the same time, narratives, it's always they're great and they're helpful, but as one of the credit rating agencies said, it's hard to know if the it'll be followed through on and what does that mean and how does one think about that? And this question between liquidity and solvency questions, which brings us back to looking at some of the sort of longer term models. Long term projections, as we just heard, are very hard to make, though it'll be very interesting to see the IMF's work on this and also the importance of scenario analysis, to be able to try to understand better under what circumstances and scenario analyses and as well as stress testing, to be able to use those to think forward under different scenarios what this looks like and to be able to build models as we move forward with technology and the growth of AI, some of this work may actually get a lot easier as well to do and to be able to better understand this. So I think that most.

One of the biggest takeaways though gets back to this question of dialogue and hopefully this session itself and this discussion that we're having here is already part of this dialogue to begin to understand the different perspectives. These are very difficult things to do. This is not easy. And to have this discussion, I think is very helpful to the structure. So with that, I think we're going to go back to the next session and back to the Vice President.


ECOSOC · Vice-President [2:05:17]:

Indeed, I thank Ms. Spiegel for expertly guiding the discussion and thank our distinguished panelists for their substantive contributions and all delegations for participating in a productive exchange of views. I now briefly pause the meeting to allow the podium to be rearranged for the third panel. Please remain seated.


Speaker 60 [2:06:33]:

Sa.


ECOSOC · Vice-President [2:07:25]:

Dear colleagues, we will now hold the third panel discussion focusing on boosting the capacity of developing countries to engage with ratings and assessments. We will examine ways in which member states can strengthen their engagement with credit rating agencies and other financial market actors, as well as how the international system is responding to the capacity building needs. I am pleased to welcome the distinguished presenters for this discussion. Once again, I'm happy It will be Ms. Charis Pigel to moderate this panel discussion. I look forward to an open, constructive and productive exchange of views.

Shar, you have the floor.


DESA · Director, FSDO · Shari Spiegel [2:08:07]:

Thank you, Vice President. And we're now going to turn to the issue of capacity which is of course, central to how developing countries engage with credit ratings and financial markets. We more broadly, and we just really heard a whole session on how vitally important that is. One job of the finance ministers, as we just heard really very well, is to shape the narrative about the country's status and trajectory and strategic vision.

So many countries continue to face structural constraints, though, in engaging effectively with financial markets and rating agencies, whether in producing timely data, engaging with investors, understanding the ratings methodologies of rating agencies, or responding to the assessments. Gaps in statistical and analytical capacity limit the availability of robust macroeconomic, fiscal and risk data and are also essential, which are essential inputs for domestic policy making as well as ratings and assessments. Strengthening capacities across data analysis and economic communication can support countries in engaging more strategically with market and better conveying their underlying fundamentals. Improving the availability and transparency of high quality data can also help broaden the information base for investors and reduce over reliance on ratings alone. So with this in mind, I'd like to invite the panelists.

This panel, excuse me, is going to explore how countries can strengthen their engagement with rating agencies and how the international system can better support these efforts. So we're going to go to again, we have a really excellent panel. I think all the panels today have been really fantastic. And we're going to start with Daniel Cash. Dr. Daniel Cash.

Daniel Cash is a reader in law at Aston University in the UK and a Senior Fellow at the United Nations University center for Policy Research. His research examines the role of credit rating agencies in global financial markets, with a particular focus on the international foundations of sovereign credit assessments in developing countries. And he was also did a wonderful job moderating this morning. And for Daniel, what are the biggest capacity constraints, institutional, analytical or informational, that limit countries abilities to effectively engage with cras, and how does this relate to their engagement with other markets actors?


Aston University / UNU-CPR · Reader in Law · Daniel Cash [2:10:30]:

Thank you, Shari. I think I'd like to begin by first acknowledging the progress that's already been made. So through my own work and my own exposure, I've seen firsthand the seriousness and the quality of capacity building efforts that are being undertaken, particularly by UNDP and aprm, who I shared a panel with today. These are sustained, practical initiatives that are already supporting countries in meaningful ways. So really the question is not whether capacity building is happening, because it clearly is.

The question is whether it is addressing the full set of constraints that shape rating outcomes. Much of the discussion focuses on a country's ability to engage with credit rating agencies, whether that's institutional capacity, analytical capability or data available. And that does matter. Because the rating process itself is critical. It is the point at which countries ultimately interface with the international financial system.

But what my research also points to is that a large part of what shapes rating outcomes actually happens and sits before that moment. By the time a country is engaging with the rating agency, the underlying signals, the information and narrative, and a level of coherence across institutions has already begun to influence how that country is being assessed. So the constraint is not only at the point of engagement, it is also how these upstream elements are produced, coordinated and sustained over time. And that's what I describe as sovereign credit formation. By that I mean a process through which a country's economic and institutional position is generated, organized and translated into signals that feed directly into the rating process and how markets interpret it.

And this matters because it's not about asking countries to do something entirely new. In many cases, these elements already exist, data is being produced, institutions are already in place and engagement is happening. But quite often it is fragmented or not aligned in a way that strengthens how countries are perceived within the rating process itself. And in that context, the interaction between countries and the financial architecture, when credit rating agencies are at its centre, can become structurally imbalanced. So the issue is less about the absence, but more about coordination and support.

And this is where I think the multilateral system is particularly well paid place to act, because many of the building blocks are already there. Through initiatives like UNDP and APRM's work, through work on data systems, institutions and transparency, there is already a strong foundation. But the opportunity is there to support these efforts in a more connected way so that they are more directly strengthening what feeds into the rating process. In practical terms, that could mean aligning existing capacity building efforts, more supporting coordinations across systems, or creating more structured engagements between countries and actors to interpret these signals, including rating agencies and investors. This could be further enhanced with innovations such as targeted credit rating readiness framework tools, structured dialogue frameworks between countries and rating agencies outside of rating cycles and much more.

However, there is a distinct and acute need for the formalisation of the pre rating period. Increasing education on what is needed precisely before a credit rating agency comes to town, and then providing frameworks to have that organisation of information verified, benchmarked, but most importantly shaped into the right narrative is now perhaps the critical frontier facing us today in relation to social sovereign credit. This is not when things are going wrong, as we heard in the previous panel, but consistently and with purpose. This is not to replace the ratings process or to place all the burden for change on developing countries, but to Ensure that what feeds into it is stronger, more coherent and more consistent. Because ultimately I think that is what will help countries engage with this system on more balanced terms.


UNDP · Chief Economist (Africa Bureau) · Raymond Gilpin [2:14:53]:

And on that I'll pass it back to you, Shari. Thank you Daniel. And Daniel, you mentioned the role of UNDP. So I'm now going to go to Mr. Raymond Gilpin, the Chief Economist and head of Strategy Analysis and Research team from the Regional Bureau for Africa and UNDP. And Mr. Gilpin, how is the international system responding to Member States needs for greater capacity in their engagement with rating agencies?

And how is UNDP specifically doing this and and other financial market actors? Thank you so much Shari and Vice President distinguished delegates, it's a pleasure to be here to discuss what UNDP is doing in this space primarily through what we call the Africa Credit ratings initiative. Since 2024, we have been engaging with African countries on three levels. First, we have been providing high level technical advisory support to countries as they prepare for credit ratings missions. Most countries are very well aware of the requirements for traditional macroeconomic assessments, but not so much for credit rating.

And so we have brought together a consilium of 15 well qualified experts who work alongside African countries to prepare them for credit ratings missions. Not just in terms of understanding the data requirements, but also bringing them up to speed on the methodology and their roles and responsibilities throughout the process. Secondly, we've been doing a lot of capacity building. Last year alone we trained over 260 mid level and senior African officials in not just the basics of credit ratings, but worked them through the responsibilities and roles, data requirements and data consistency issues in a number of countries. We've actually initiated interagency credit ratings committees to ensure that data is available not just in a timely manner, but also in a consistent manner across the board.

These efforts have yielded significant dividends. In the near term we are seeing countries better prepared and more more informed and we're also seeing them more engaged in the credit ratings process. To support this, we have initiated an E course, NCREDIT Ratings in partnership with the UN System Staff College. And so across the board, members of the Interagency committee in African countries can take this course, come up to speed and then then benefit from deeper insights in some of our workshops and courses. So far we are working on sustaining this investment in capacity and we have garnered community of interest across the continent of 700 individuals who participate in our workshops, our seminars and also some of the the conferences that we've organized.

Underlying this is a web portal that we have put in place the web Portal does three things. First, it provides data. Many countries aren't really aware of the range of data required. So we provide the data. We also provide analytical tools.

And so if they want, if countries want to do rudimentary what if scenarios, they can. And the third thing that we do is we provide them with a lot of analytical tools, analytical reports to bring them up to speed.

We know that this is not something that we can do alone. Yes, we're making a lot of progress on the capacity building front. But we do know that there are aspects of African markets that aren't as focused, fully captured in the credit ratings process as they should be. And because of this, we've last year alone we had three high level strategic dialogues with the big three credit ratings agencies in New York and Washington D.C. to bring them up to speed with what we are hearing from the ground and to work with them and a broad range of experts on way, on point practical ways to address these. And a lot of the improvements that we have witnessed over the last couple of years derive from these efforts to not just prepare African countries, but also to engage with the credit ratings agencies.

This is quite a bit of work. We don't do it alone. And we're very pleased to be partnering with the Africa Peer Review Mechanism, the UN Economic Commission for Africa, the Africa center for Economic Transformation, and quite Africaly and quite a few others. This is important for three reasons. One, we need to sustain this work.

Secondly, we need to scale up because more African countries, currently 20, just a little over 25% of the continent is yet to be rated. And most of these countries are looking at bond issuances for strategic investments in infrastructure and technology. And so I think that's one level that we have to sustain it. The second level is the fact that of the 34 countries that are currently rated across the continent, only three, three are investment grade. And so we have to make sure that those three remain investment grade and those that are not yet move up.

And the third reason why I want to do this is because we believe that the credit ratings are one data point. But it is overwhelmingly important on the African continent because you don't have that many data points. And the first and in many cases only data point that many investors and financial institutions look at when you're thinking about capital flows to the African continent is the other credit ratings. So we have to work on getting these right. Thank you, thank you for your intervention.


DESA · Director, FSDO · Shari Spiegel [2:21:46]:

Also all of the work that you're doing. I'm now going to pass the floor to, to we heard from two of the rating agencies this morning and the two of the big three and the third one we are going to hear from now. So, Mr. David Ragovic, the Vice President and Senior Analyst for Sovereign Risk from Moody's. Thank you, Sherry, and thank you for the invitation. It's a pleasure to join this discussion today.


Moody's · VP & Senior Analyst, Sovereign Risk · David Ragovic [2:22:10]:

Let me begin with a simple point. For many of the sovereigns here involved in this discussion, engagement with credit rating agencies is more than just a technical exercise. It affects financing conditions, it affects market access, and it affects how countries policy credibility is understood by the market. And that has a significant impact. And this is why we're here for this discussion now.

At the same time, I'm going to reiterate something that we've heard several times today already, the role of rating agencies in ratings. Ratings are opinions about the relative credit risks. They're just one input in the market discussion. Our role as a rating agency is to assess credit fundamentals in a transparent manner, in a consistent manner, not to make policy choices and not to substitute for investor due diligence. Now, from Moody's experience engaging with sovereigns, there are three main gaps that I want to highlight in terms of a country's capacity to present their creditworthiness effectively.

First, there's often a gap in data quality, data timeliness and data consistency. Information often exists, but it can exist across institutions. It can be delayed or it can be incomplete and it can be difficult to reconcile over time. And this has an effect. This increases uncertainty, and when uncertainty rises, it affects the level of confidence around the fiscal trends, around the baseline scenario, around contingent liabilities, and around financing plans.

The second challenge is not just about having data, but having it organized in a narrative in a way that's easy to explain in a credit narrative. So sovereigns may produce a lot of data, but may not always be in a way that's directly able to answer key credit questions. Or the people that can explain the data are not involved in the meeting. And so when there are follow up questions, they go unanswered. What matters for Moody's and for Ratings is not the volume of data, but understanding how that data connects with policy actions, how it connects with institutional reforms that are pursued, and how it affects risk management in practice.

For this form, I would emphasize improving or emphasize economic and financial messaging and improving the messaging around data availability around country's economic profile. To put this in practical terms, some of the most useful engagements that we've had with issuers are ones that connect the dots. Very clear, clearly how fiscal reforms will improve debt affordability over time or how strong fiscal rules will improve policy credibility when the transmission is clearly explained, it improves the quality of meetings. Now the third point and the last point I want to make is around engagement. And so sometimes the strongest engagement tends to be when we see the Ministry of Finance, debt management offices, central banks, all aligned on their core macro fiscal stories and in a way that they can respond in a timely manner to follow up questions.

Stronger capacity or I should say, why does this matter? For this conversation and for ratings, stronger capacity improves the quality of the rating dialogue. It gives a fuller evidentiary base. It gives better institutional context and a greater confidence around the reliability information that's being assessed.

Better engagement doesn't. Better engagement doesn't change a sovereign's rating by itself. It can't, it can't substitute for debt affordability issues. It can't substitute for exposure to external shocks. But engagement can ensure that the genuine strengths of sovereigns, the reforms that are being pursued, are properly understood and in a way that can affect the sovereign rating.

With that I'll stop. Thank you. Thank you very much for your comments and thoughts. We're going to pass the floor now to Ms. Vershan Ahmad, the Managing Director and global head of sovereign advisory from JP Morgan. So before we listened to a long term investor and now we're listening to, well, you'll talk more about what your role is, but an advisory function for developing countries.


JPMorgan · Managing Director, Global Head of Sovereign Advisory · Roshan Ahmad [2:26:39]:

So. And how is JP Morgan helping sovereigns improve their communication with markets and rating agencies to better reflect their economic fundamentals? Thank you very much. I will just take a step back because I think we've spoken a lot about data and about institutions and I also want to add that it's a lot about people. It's people who are rating the countries and it's people on the side of the soil, sovereigns that are representing those countries as well.

And the biggest thing that I think we've worked as a team at JP Morgan is to humanize the process because at the end of the day, ratings are as much an art as there are science. And we can go at length to talk about data, data quality, but I would emphasize the point that some of my colleagues over here at the panel have raised that it's about presenting that data. And JP Morgan's been doing this for almost three decades at this point. I personally have worked in this space, space for the last 20 years. And when we say building institutions and I'm going to bring it down to people again, people change at the government level.

As well. So when we say bringing, you know, building institutions, it's not just trainings and transparency at the ministerial level. It is bringing it down to actually everybody who works at a dmo. It's bringing it down to the technical level at the central bank as well. It's bringing it down to a Ministry of Investment that could be important, or a Ministry of Energy as well.

So really, a successful ratings mandate is a lot about resources, it's a lot about dedication, it's a lot about senior sponsorship from the top of the house. At the government side, we have seen great results in countries where a Prime Minister's office has taken ownership of the ratings process or a minister has sponsored it and that trickles through them across the chain. The other thing I was saying is that it's also about building relationships with the agencies. So we've spoken to Moody's, Fitch and S and P. There are also people at the other end. They have been rating these countries or countries in that region for a very long time.

They tend to develop views. There could be biases that could be subconscious, that could be conscious, but there are ways to work around it. And we as an institution have been working a lot with governments around the world to go around that. And that goes to the point of building engagement across all levels. It's not just about the rating agency visiting the country.

It's also about every opportunity at the IMF meetings, at the World bank meetings, at the UN conference here in New York as well. Going beyond just the primary analyst who is responsible for rating you. There's a whole committee in place for that reason to go over the biases. So there are different ways to work around the bias bias topic, and I'm happy to touch upon that later on as well. I will say building the narrative and making the process seamless.

I don't want to underestimate it in our experience for working on, you know, with multiple countries around the world, there is a lot of breaking down of dialogue that happens within the country level. Just because a Ministry of Investment or a Ministry of Energy, that's a very important role to play in the credit story, doesn't really know what the energy, what the analyst is looking for when they come to the country. And now the question is, is it the Ministry of Finance responsibility to educate them, or is it the rating agency's responsibility to educate them of what is it that they are looking for from that particular agency? I will give credit to all three of the agencies, and I work with them quite closely, that over the years they have made a lot of effort to do transparency presentations. They offer it every time when they go to countries.

They have offered to host countries and their offices to explain they have taken on board any complaints. There's a whole due diligence process that they work around it. So there has been a lot of work done to onboard any grievances that sovereigns have had over the years as well. I think with that I will close my comments. Thank you so much.


DESA · Director, FSDO · Shari Spiegel [2:30:27]:

And I think that the panelists, we've heard a lot of really good ideas and certainly also the efforts already being taken both by the system system and others, as well as by the rating agencies themselves. I think that this really underscored the discussion from the previous panel on the importance of dialogue, on the importance of data. Yes. But also on the narrative and on understanding the personalities and understanding the issues. There's a lot of I think the other piece of this is that there is a lot of support for countries.

It needs to be maybe strengthened in some places, but a lot of support both from the system, as we heard from UNDP as well as from the private sector, from JP Morgan and others. So with that I'm going to go to the lead discussant, Ms. E. Gayhu Teferra. Sorry for that, who spoke earlier today. So I'm sure earlier today your name wasn't mangled as much as I just mangled it. The senior researcher on credit ratings representing the African People Peer Review Mechanism and the African Credit Rating Agency.


APRM / African Credit Rating Agency · Senior Researcher on Credit Ratings · Ejigayo Tefera [2:31:31]:

Thank you, Shari. My name is Ejigayo Tafera. So it's okay. You have got it a bit wrong, but not so bad. So thank you once again for giving us the floor.

And this issue of developing capacity of African countries to engage African Rating agency has been the mandate that was given to aprm and it has been one of the functions that African Peer Review Mechanism has been spearheading. And through this engagement that we have had with African countries, we have noted that the challenge is not just on how countries are rated, but also how they engage in the rating process itself. Chair, Allow me to highlight three areas of gaps that we have noticed through the work that we have been undertaking across the African continent. The first is gap in the data system and coordination. Many African countries face challenge in terms of producing timely, consistent and comprehensive data.

But equally important is the fragmentation of data. Data Data do exist in different ministries, central bank and other agencies, but often they lack the unified interface for rating agencies. So as a result, rating assessments, they may rely on incomplete or outdated information. APRM's work in this particular area shows that weak data ecosystem and poor interagency coordination have historically contributed to lower ratings and high risk premium. The second area that we have also noted in this work Chair is that there is limited capacity to engage rating agencies.

Engagement with rating agencies is highly technical as you know, and it requires understanding rating models, anticipating to triggers for upgrade or downgrade and responding effectively during the rating reviews. Through the technical support missions that we have been conducting in collaboration with UNDP and uneca, we have found that many countries lack a dedicated, well trained license team to manage this rating process systematically. This creates an asymmetry. Countries are are often reacting to ratings rather than actively shaping the analytical process behind them. The third gap that we have identified is weak narrative formation and strategic communication.

This is perhaps the most overlooked gap in the ability to articulate credible forward looking economic narrative through rating agencies and too often reforms, resilience factors and strategic progresses are not fully communicated or understood. As a result, countries remain passive recipients of external judgments rather than an active participant in shaping the created story. To address these gaps, the APRM, in partnership with the United Nations Economic Commission for Africa and the UNDP has begun to respond through a credit rating support program which combines trainings, technical assistance and policy advisory support. And through this work we have been conducting missions to serve to several African member states to support the rating assessment through and supports the countries to draw strategy for engaging international rating agencies and also to coordinate key institutions in terms of creating alliance and team and the scope of this work includes training officials from ministries on creating methodologies which has already been highlighted by my colleague Raymond. We've been doing that in for the past five, six years supporting the establishment of a national credit rating committee which often is coordinated on ad hoc basis, conducting risk diagnosis and pre rating assessments and strengthening institutional coordination across finance ministries and central banks.

Chair, I would like to conclude by stating that we already speak seeing results in these targeted interventions and countries are becoming more proactive and better equipped to engage rating agencies. We wish to encourage other development partners to join hands in supporting developing countries in building capacity building exercise in developing countries. I thank you. Thank you so much. We don't have much time but I'm going to go back to the panelists for a very quick second round, maybe two minutes each panelist to just first of all if there's anything from the other panelists that you've heard that you want to comment on and also if there's anything missing that was we've heard a lot of the issues, data narrative Building the personal relationships and the, and realizing the human side of all of this.


DESA · Director, FSDO · Shari Spiegel [2:37:13]:

But is there anything that you think is missing that we should also include as we think about what does it take to scale up support and what areas of support we need the most. So maybe I will start. I'm going to go backwards so I'm going to start with Roshan.


JPMorgan · Managing Director, Global Head of Sovereign Advisory · Roshan Ahmad [2:37:34]:

I think for us something that I've always emphasized is that you are your best advocate as a sovereign and you are the best person place to sell your narrative when it comes to international markets, whether it be rating agencies or even investors for that matter, and I want to emphasize again, and I sound like a broken record, is that it's not just the Ministry of Finance. I think that is the biggest piece when you look at a credit story and even within the methodology for all of you who are familiar with it, there are many different angles to it. It is about bringing everyone on board and a big fan and big fan of things that we do is that we try to speak also to the private sector, not just the public sector when it comes to narrative building because the private sector has a huge stake and a huge role to play in selling the country's credit narrative. And you'll be surprised that in many times in countries they're actually quite willing to speak to the rating agencies on behalf of their own story or to speak with investors as well. So I kind of want to take away the onus on just one Ministry of Finance.


DESA · Director, FSDO · Shari Spiegel [2:38:37]:

I think there are a lot more stakeholders and they can all be brought on board whether it's through an advisor or an mdb, whoever it is that's advising you. But it's bringing everyone who's best placed to tell their part of the narrative to bring the whole narrative cohesively together. These are really great points. And first of all, the whole of government approach seems really applies at across the board, not just for the discussion with rating agencies but for the entire planning process. But second, this point about rating agencies speaking to the private sector as well and how important that is that the narrative they're going to be hearing is broader and how does the government think about using.


JPMorgan · Managing Director, Global Head of Sovereign Advisory · Roshan Ahmad [2:39:12]:

Yeah, sorry, one more thing because I know we spoke about the MDBs. The rating agencies do speak to the IMF, they do speak to the World bank. They do speak to any of the MDBs that may have a local rep office, whether it's the ADB or EBRD and others. So there are a lot of avenues and opportunities for MDBs to also partake in the process and it comes down to who do you know? As basic as that, if the rating agency analyst is aware and has relationships directly with the MDBs, they will be engaging them in bringing on board their viewpoint.


Moody's · VP & Senior Analyst, Sovereign Risk · David Ragovic [2:39:42]:

But if they don't know, they don't know. So that is something also that governments can do is to bring that them in. So it's not just the private sector, but the MDBs and the embassies as well. Great. And David, maybe you can go reply to some of these from your perspective from the rating agencies.

Thank you. So, I mean, first let me compliment the work that undp, APRM and others are doing in terms of improving the transparency, improving the dialogue that rating agencies are having with governments. I think it's important. The message from today really is that stronger engagement with credit agencies won't improve credit fundamentals on its own, but it can help ensure that they're understood fully and that they're assessed with greater confidence. That not only benefits the ratings engagement, I think, but it also benefits the wider financing community.


UNDP · Chief Economist (Africa Bureau) · Raymond Gilpin [2:40:33]:

Again, the biggest capacity gaps we see today are still in producing reliable and timely data as that's translated into a coherent credit narrative that can help to sustain institution building over time, helping to improve the overall quality of future engagement. Thank you. Thank you, Raymond. Thank you so much. I think for me, two things.

One is consistency that we have the ability or the capacity to continue working with African American countries and preparing them for both the data side and the process side. But secondly, scaling up, we do need to ensure that we're able to not just increase the number of countries we engage with, but also broaden the tent. So we have, we continue to have the engagements with the ratings agencies, but also with bilateral and other multilateral partners. Because for Africa it goes beyond credit ratings. It's a development financing imperative.


Aston University / UNU-CPR · Reader in Law · Daniel Cash [2:41:43]:

Thank you. Thank you. And so the last word will now go to Daniel.

Thank you, Shari. I think I'll extend what Raymond was saying, but it's probably worth contextualizing. My work is focused on the African continent. That's where a lot of this is disproportionately being seen. But this is a global problem.

And the second thing is that there is an uncomfortable truth that underlies all of this. And what we're asking for and what all is being suggested on this panel today is not free. It's something you have to invest in. So we heard from, for example, the representative of Paraguay was talking about the incredible investment that goes into upgrading one's rating. We heard from the representatives from Philippines where There's a specific agenda in play at getting to a specific level.

There are real financial costs, there are political cost to this. And if you think about it, we're essentially asking some of the most cash strapped countries on the planet to invest in something that will pay off down the road. And that's a very difficult ask when you think about it. So I think it's really important that as a financial system, and that's why I mentioned earlier about the multilateral players, there's a role to be had here, not to just pay for things. I'm not saying that, but I'm saying about supplementing that need.

So that could be convening others to provide that support, to share best practice. When we heard it from public, Paraguay, all of that best practice that's been built up, it's fantastic for Paraguay, please don't get me wrong. But it'd be fantastic to share that across the region, say South America or Central America, where we have champions or we have victories and success stories like the three investment grade countries in Africa, we need that to be shared as much as possible and we need that burden to be shared across countries regions as much as as possible because it is a big burden to improve that knowledge base at the floor so that we can have an equal playing ground. So I don't know if that's a warning or a bit of a content. Thank you so much and for all of these comments and to the whole panel for your really insightful comments and thoughts and for the work that everyone is doing, I would just add that based on following up on what Daniel just said, I mean the, and also what Raymond said, that ultimately this is about development finance more broadly.


DESA · Director, FSDO · Shari Spiegel [2:44:07]:

And so the rating strategy should really be thought of in parallel together with the financing strategy and the development strategy, how the financing for development strategy is and how that fits in with the rating strategy. And maybe one of the interesting things that the system can also help with is are those the same or where are they different and where they're different? You know, how does one work with a country to understand, well, this is where the ratings may be different from thinking through a long term development strategy. And how does one think about putting those two things together so that the ratings doesn't overshadow the government's long term own strategic priorities. And so I think that maybe the system can help to better understand where these overlap and if there are differences where they are and why.


ECOSOC · Vice-President [2:44:59]:

So that, that, that can really help with the strategic planning of the government. But with that I'm going to pass the floor back to the Vice President for comments.

I thank the moderator for conducting the panel and all presenters for their substantive contributions to the discussion. I now invite delegations to engage the presenters in an interactive discussion. Request for the floor should be made by pressing the microphone button. The time limit is five minutes for statements on behalf of group and three minutes for individual interventions.


Palau · AOSIS [2:45:39]:

So I now give the floor to the distinguished representative of BALAAM on behalf of eosis, to be followed by China and Zimbabwe Chair for Small Island Developing States the challenge is not only how we are assessed, but also how we are, but also our ability to engage with the system that assess us. Credit rating processes are complex, resource intensive, and often inaccessible to many seeds. As a result, our countries are frequently evaluated through frameworks that we have limited capacity to influence and sometimes limited ability to fully understand or respond to. Many sids lack the capacity to effectively engage with credit rating agencies, manage complex data requirements, or communicate their economic narratives. This contributes to a persistent imbalance where countries are assessed through frameworks they have limited ability to influence.

This imbalance begins with access. Only 13 states currently have sovereign credit ratings, reflecting the significant financial and administrative barriers involved. The cost of obtaining and maintaining a rating is prohibitively high for many states, particularly those already already facing high debt burdens and constrained fiscal space. While those without a rating, the consequences are even more immediate. They face even higher barring cost and further limit their access to international capital markets, markets, and investment.

Even for those that are rated, engagement remains a challenge. Effective interaction with credit rating agencies requires strong technical capacity in debt management, macroeconomic analysis, and financial communication. Yet many sids operate with small administrations and limited resources. With this in mind for aoc, boosting the capacity of sids with ratings and assessments requires deliberate actions across three key areas. First, we must strengthen technical capacity.

Sids need targeted, sustained support to engage effectively with credit rating agencies, particularly in debt management and economic analysis. Dedicated advice to support mechanisms for sids could play an important role in boosting the capacity of sids to engage better with the rating system. Second, AOSIS calls for greater investment in national data and statistical Stronger national data framework to better capture the realities and circumstances of states are essential. This will enable countries to not only improve their engagement with rating agencies, but also to present more accurate assessments of their economies. Lastly, we must reduce the structural barriers within the systems itself system itself.

This includes exploring models to make rating more affordable, simplifying administrative administrative requirements, and strengthening transparency and nuanced approaches in rating methodologies. For sids, greater recognition and clarity on how climate risks and resilient investments are taken into account in rating assessments would significantly improve engagement. Chair Excellencies Our objective of mandating this recurring meeting through the Sevilla commitment at its core is about balance. It is about ensuring that countries are not merely passive subjects of external assessment, but active participants in shaping how our credit worthiness is understood. These discussions are one part of improving this engagement, but this engagement must also bring about reform.

It must help to ensure that credit ratings more accurately reflect both the risks we face and the resilience we are building at sits for in 1944, the UN Secretary General and the Prime Minister of Antigua and Barbuda issued a joint call to reform credit rating methodologies to create long term ratings and recognize the long term growth potential of sids. Without this, our efforts to reform the international financial architecture will remain incomplete. With such reforms we can move toward a more equitable and effective system, a system that supports rather than constrain the sustainable development and resilient prosperity of small island developing States. I thank you. I thank the distinguished representative of Palau.


ECOSOC · Vice-President [2:49:56]:

I now give the floor to the distinguished representative of China, to be followed by Zimbabwe and Armenia.


China [2:50:04]:

Thank you Chair. I thank the experts for your sharing of recommendations regarding boosting developing countries capacity to engage engaging ratings and assessments. China encourages and supports developing countries in cultivating their own credit rating and assessment systems, improving the quality of credit information and speeding up their credit rating agency's tempo to go global so as to continuously enhance their global impact and competitiveness. As a developing country and home to the world's second largest bond market, China will continue to open up its credit rating industry to a higher level. I thank you Chair.


Zimbabwe [2:50:44]:

I thank the distinguished representative of China. I now give the floor to the distinguished representative of Zimbabwe, to be followed by Armenia and the European union. Thank you Mr. President. Strengthening the capacity of developing countries to engage with credit rating agencies is central to improving market access, reducing borrowing costs and supporting sustainable debt management. Many developing countries, including my own Zimbabwe, face constraints in statistical systems, data quality and institutional expertise limiting our ability to effectively engage on rating methodologies and shape how credit worthiness is assessed.

In our view, improving engagement requires a more systematic approach across four key strengthening the quality, transparency and timeliness of macroeconomic and physical fiscal data deepening the technical understanding of credit rating methodologies and processes enhancing investor relations and policy communication and building in house capacity for debt sustainability analysis and scenario modeling. If successfully implemented, these variables will enable countries to present coherent data driven narratives that reflect ongoing reforms and long term developments strategies. Mr. President the compromise of de Sevilla recognizes the importance of strengthening the capacity of African countries to engage with credit rating agencies to address the so called Africa risk premium. While we welcome ongoing initiatives by the APRM and UNDP and other partners, capacity building efforts remain fragmented and uneven in coverage. Greater coordination is needed to ensure that support is sustained, country specific and responsive to national priorities.

Particular attention should be given to countries without sovereign credit ratings where capacity constraints are often most acute and the potential gains from engagement are greatest. Zimbabwe therefore emphasizes that capacity building efforts must be linked to tangible outcomes, particularly improved market access, better financing terms and strengthened investor confidence in that contest. We would like to ask the panelists, how can the international system better coordinate and scale capacity building efforts to ensure that countries, particularly those without sovereign ratings, are able to translate technical support into measurable improvements in market access and borrowing costs? In conclusion, Zimbabwe stands ready to engage constructively with partners to strengthen our national capacity and contribute to a more transparent, inclusive and effective credit rating ecosystem. I thank you.


Armenia [2:53:27]:

I thank the distinguished representative of Zimbabwe. I now give the floor to the distinguished representative of Armenia, to be followed by the European Union and International association of Youth and Students for Peace.

Thank you, Chair. First, I would like to express express appreciation to the panelists for their valuable insights. Strengthening the capacity of developing countries to engage effectively with credit rating agencies and financial market actors is an essential component in improving access to sustainable and affordable financing and an important factor in ensuring fair and balanced assessments. As mentioned before, many countries face constraints in understanding the rating methodologies, producing high quality debt data and effectively communicating their economic policies and reforms. These capacity gaps can limit the extent to which national realities are fully reflected in credit assessments and ultimately in financing conditions, underscoring the importance of enabling countries to effectively communicate their economic narratives.

In this context, strengthening engagement with credit rating processes and market participants becomes particularly important. Importance experience across countries shows that sustained efforts to enhance transparency, data quality and institutional frameworks can support more effective interactions with both rating agencies and investors, contributing to a clearer understanding of economic developments. At the same time, there is scope to further strengthen these efforts, particularly as financial systems and assessments methodologies continue to evolve. Addressing these gaps requires a collaborative approach involving member states, credit rating addresses and international institutions and other stakeholders. In this regard, let me highlight three points that are essential.

First, strengthening institutional and technical capacities, including in depth management, macroeconomic modeling and statistical systems, through targeted support and cooperation to ensure the availability of reliable, timely and comprehensive data. Second, enhancing investor relationship and communication capacities within governments, including through technical assistance and knowledge sharing, enabling countries to better present their policy frameworks, reform efforts and long term strategies and third, expanding targeted capacity building and technical assistance, including through the United nations system, international financial institutions and regional organizations, with a focus on practical tools and peer learning as well. Finally, we would like to highlight the importance of more structured and continuous dialogue between Member States, credit rating agencies and investors and in this regard, today's meeting marks an important step reaffirming the role of ECOSOC as a platform to foster more regular, inclusive and forward looking engagement. I thank you.


EU · EU [2:56:08]:

I thank Armenia. I give now the floor to the distinguished representative of the European Union, to be followed by the International association of Youth and Students for Peace and Norway Excellencies Colleagues, I have the honor of delivering this statement on behalf of the European Union and its Member States. At the outset we would like to stress our long standing belief that preserving the independence, analytical integrity and non interference with the content of credit ratings and rating methodologies is the best way to ensure their credibility and usefulness. At the same time, we believe that these should go hand in hand with greater transparency, stronger dialogue and enhanced engagement with developing countries so that ratings and assessments can better reflect economic realities and support informed investment decisions. This is in fact not just a belief, but a policy choice enshrined in our legal frameworks, in line with our policy frameworks and reaffirmed by the Code of Conduct of Iosco.

Indeed, we consider that the use of rigorous, robust and systematic methodologies is at the heart of the assessment of the credit rating agencies. Further, to improve the development of better, more transparent sovereign and corporate ratings, it is important to boost the institutional data and statistical capacity of developing countries to fully engage with credit rating agencies and other financial actors. In this context, capacity building can contribute to improving public financial management, including debt management practices, as well as the quality, availability and timeliness of fiscal and macroeconomic data. Such improvements may help enhance transparency and credibility, thereby fostering more constructive and informed interactions with credit rating agencies. In this regard, we also emphasize the importance of fostering peer learning and including on the effect of transformation towards sustainability on sovereign ratings and identifying good practices among UN member states.

We also note that since 2025, progress has been made in fostering more regular dialogue between credit rating agencies and sovereign issuers, as well as in expanding technical assistance and alternative analytical tools. The European Union welcomes these developments but believe that more can and should be done to institutions institutionalized, structured and continuous engagement between government rating agencies, investors and other market actors beyond the formal rating cycle. In our view, Member States can strengthen their engagement with rating agencies and financial market participants by investing in stronger national data and statistical systems, improving debt and fiscal transparency, developing dedicated investor relations functions and ensuring that reform trajectories and resilience enhancing policies are communicated in a timely and coherent manner. These steps can help reduce information asymmetries and support more informed and forward looking risk assessments. The European Union also takes note of ongoing proposals and at diversifying the credit assessment ecosystems including the establishment.

I thank the distinguished representative of the European Union. I now give the floor to the representative of International association of Youth and Students for Peace to be followed by Norway and Portugal. Thank you. Chair I speak on behalf of the FFD Children Youth Constituency of the major group of children and Youth. Chair first, we highlight the capacity to engage with credit rating agencies and is not simply a technical skills gap, but a power gap.


International Association of Youth and Students for Peace · FFD Children and Youth Constituency [2:59:50]:

The current system is highly concentrated with some firms based in New York and London issuing ratings that significantly influence borrowing costs for governments representing billions of people. The system has no binding accountability to those people, no multilateral oversight and no independent mechanism for appeal. Is this fair? We reiterate our call for establishing a universal intergovernmental process under the auspices of ECOSOC to govern the credit rating system. This should be advanced through the FFD Forum and the upcoming SDG Summit Political Declaration A strong international financial architecture is a prerequisite for the post2030 development framework.

Second, when high borrowing costs, often driven by subjective political risk assessments, force governments to prioritize debt service over social spending, it is the budgets for education, peace building and and youth services that are first to be cut. We cannot build peaceful, just and inclusive societies if the international financial architecture does not address the military industrial complex and treats investment in youth as a fiscal liability rather than a sovereign asset. Third, that said, in the immediate term, capacity matters. Ministries that understand raging mythologies engage proactively with raging agencies. The UNDP Africa Credit Ratings initiative and the APRM's guidelines are some examples, but these initiatives are islands in an ocean of asymmetric information.

Hence, we also call for a dedicated multilateral capacity program under ecosoc, institutionalized with the follow up of the CIVI commitment focused on data sovereignty, dialogue between Member States, central banks in rating agencies and integrating children and youth in a process that engage rating agencies. Once again, we urge Member States to use the political momentum of the SDG summit and FFD4 outcome to establish that process before the post2030 discussions crystallize. Without this architecture in place, we thank you.


Norway [3:01:59]:

I thank the representative of International association of Youth and Students for Peace. I now Give the floor to the distinguished distinguished representative of Norway, to be followed by Russian Federation and Portugal.

Thank you Chair and to all panelists for insightful interventions here today. Norway welcomes this special meeting on credit ratings and we are supportive of the overall effort to strengthen dialogue between Member States, credit rating agencies and relevant actors in the credit rating ecosystem. Today we have heard from many speakers that we need to improve the accuracy of credit ratings and ensure that ratings are not based on perceptions, but rather that they capture realities, and improving the availability of high quality information is central in this regard. A significant achievement from the Sevilla commitment is that data and statistics are not merely addressed in the monitoring chapter, but recognized as a key enabler across all the action areas. It matters for both credit ratings, tax collection, private capital mobilization, debt management, combating illicit financial flows and so much more.

As others have touched upon earlier today, the GDP indicator is a concrete example. Overall GDP as well as debt to GDP and tax to GDP ratios are key considerations in the sovereign credit rating process. However, GDP estimates are often based on outdated and sometimes incomplete information. Updating GDP base year may give an entirely different picture of the state of the overall economy and we have seen many examples of rebasing exercises that have led to substantial increases in gdp and while this is good news for the relevant country, it demonstrates the inaccuracy of the estimates. Now turning to the issue of capacities to generate and utilize reliable and timely information for engagement purposes.

As we are discussing here today in this panel, it is a challenge that national statistical agencies are often underfunded and that much of the global support in this area focus narrowly and often at a project level rather than treating data as a core public infrastructure. Another challenge, as several panelists have touched upon here today, is that relevant information that does exist within various domestic institutions institutions may not always be shared and used across the entire government system. This may sometimes be to legal frameworks or other administrative or other types of barriers. So it is clear that we need a holistic and integrated approach both when it comes to the domestic and the international financing for statistical systems in use and we must always promote the whole of government approach. Chair Norway CO leads the Sevilla Platform for Action Initiative FFD 4 and the Future of Data.

The initiative connects the data and statistics community with the broader Financing for development community and will soon be publishing a set of recommendations on how to accelerate implementation of FFT4 commitments on data and statistics and we believe this.

I thank the distinguished representative of Norway. I now give the floor to the distinguished representative of the Russian Federation to be followed by Portugal and Maldives.


Russian Federation [3:05:26]:

Thank you, President. We thank the participants for the comprehensive discussion. We support an exchange of experience improving statistic capacity, expanding the work of national agencies, the credit rating agencies, to ensure transparency, accessibility of data. But we would like to add one aspect that we ought to keep in mind.

Today. We often heard about important characteristics of CRAs as being independent. Independence is supposed to be a condition for objectivity. But we must note that often this independence actually works only in the interests of the cras themselves. Our experience has shown that based on political decisions on the use of unilateral coercive sanctions, all three of the major credit rating agencies, which are the monopolists of the sovereign ratings, have left our market.

And what's even more interesting is the situation that has taken place with the regional development banks in which the Russian Federation takes part, which received recommendations to stop cooperating with our country to maintain their triple A ratings. This is obviously political pressure. What else could it be? You believe that this kind of action with regard toward developing countries could have an even greater negative impact?

Could Member States reduce the politicization of credit ratings and ensure they're objective in nature? Thank you.


Portugal [3:07:15]:

I think they'll get the Federation. I think which representative of Portugal to be followed by Maldives and Nigeria. Thank you, Mr. President, for giving me the floor and also to the panelists for their insightful interventions. Portugal aligns itself with a statement delivered by the European Union and would like to add the following in its national capacity three points on our behalf. First, fairer and more reliable credit assessments depend not only on methodology, but also on the institutional and statistical capacity of the countries being assessed.

Many developing countries still face constraints in producing timely, credible and sufficiently granular macroeconomic, fiscal and risk data and in engaging consistently with rating agencies and market actors. Secondly, Portugal believes capacity building should be understood in a broad sense. It includes support, statistical systems, debt management capacity, macroeconomic governance, transparency, and the ability of national authorities to communicate reform efforts and policy trajectories clearly and consistently. This is an area where bilateral cooperation can make a meaningful contribution. Portugal has some experience in disregard for cooperation aimed at strengthening national systems.

Third, we would stress the important role of multilateral development banks and international institutions also in this context, including when cooperating among themselves as a system enabling a more objective and comprehensive view of local situations and the sharing of better solutions. MDBS can provide technical assistance, data support, institutional strengthening, and investor facing credibility. Used well, this wider ecosystem can help countries strengthen ownership over their financial narrative and engage with rating processes on a more informed footing. For Portugal Stronger capacity is essential to more transparent, more balanced and more accurate assessments. I thank you.

I thank the distinguished representative of Portugal. And I give the floor to the distance distinguished representative of Maldives, to be followed by Nigeria and South Africa. The last speaker.


Maldives [3:09:13]:

Thank you, Mr. President. The discussion on capacity is important, but it is often framed in one direction. Developing countries are encouraged to strengthen data, improve engagement and build analytical capability. This is necessary and many of us are investing in these areas. Areas.

But there is also a structural question on the other side of the market. Under the current model, analytical depth is not evenly distributed. Coverage of smaller and more remote economies is often necessarily broad rather than deep. This reflects how incentives are structured. Where market size is limited and issuance is infrequent, the commercial case for sustained granular analysis is weaker.

As a result, country specific nuance can be harder to fully incorporate. The constraint, therefore, is not always the absence of data. It is the incentive to invest in acquiring, validating and continuously updating that data. This creates an information gap that runs both ways. Countries may feel that their circumstances are not fully understood.

Agencies operating within resource constraints may not always have the depth of engagement required to capture evolving realities. And over time, this can become self reinforcing. If engagement is to improve meaningfully, it requires not only stronger capacity on the issuer side, but also sufficient and sustained analytical investment on the agency side. The question therefore, is not simply how countries can engage better, but how the system can support more business balanced analytical coverage across different types of economies. My question to the panel is what mechanisms, whether institutional, multilateral or market based, could help strengthen analytical depth for smaller economies, particularly where commercial incentives alone may not be sufficient?

And how can such mechanisms be designed in a way that preserves independence while improving the quality and symmetry of information within the system? I thank you. You. I thank the distinguished representative of Maldives. I give the floor to the distinguished representative to Nigeria to be followed by South Africa.


Nigeria [3:11:28]:

Thank you, Mr. Vice President. We align. Nigeria aligns with the statements earlier delivered in the morning by Uruguay on behalf of G77 and Angola on behalf of the Afghan groups. So my intervention now would be more in an interactive sense, Right? It appears from the discussion so far that credit rating seems quite a bit subjective.

And I drew a small table which I would read out between some details of my country and an unnamed country. Right? A European country. Right. So Nigeria's debt to GDP is between 39 and 52%.

These unnamed European countries between 153% to 154% debt to GDP. Nigeria has never defaulted on Sovereign debts this country has in the last, let's give the last 30, 40 years. Nigeria's foreign reserves is 50 billion USD above north of that this unnamed country is 43.5 billion. But yet Nigeria's last sovereign bond rate was between 8.6% and 9.1% for two 20 and 30 year Euro bonds issued in USD while this unnamed European country last bond rate was 3.9% and four between 3.9% and 4.0%. So I think this should bring the point home of the impact of credit ratings on countries like mine and I would say the entire African continent it increases drastically the cost of capital and there are estimates that this is what about 75 billion annually for African countries in excess credits and foregone lending.

So a lot of what people have said I agree with it. I picked up on Roshan's point where she mentioned that credit rating agencies have to also speak not just with governments but also with local investors, local players in the local economy who are doing quite well. And I don't know, sometimes these factors are not taken into account. For instance we have banks declaring really good profits operating our economies yet our sovereign rating is not investment grade. So how are they doing it?

Some of these things need to be taken more into account by the credit rating agencies. And of course we also appreciate the UNDP's RBA Regional Bureau of Africa for the work that you are doing with trying to make a better liaison and conversations between our national authorities and private sector and with the rating agencies. We hope that that will improve some of these issues that we see. I think one major issue there is that the ratings agencies are not on the ground in Africa. I heard in the first panel or so they are just two of them, just have one office each in Africa for the entire continent.

I hope that I thank the distinguished representative of Nigeria. I give the floor to the distinguished representative of South Africa, the last speaker.


South Africa [3:14:46]:

Thank you Chair. We will start by appreciating the briefing again from this panel. It was enlightening and very encouraging. As an African I was quite impressed by the discussant there and our brother here who elaborated on the work that has been done on the continent. Having having said that I would like to make the following remarks.

Mr. President, evidence is abound that some of the foremost barriers for developing countries, especially African countries, has lack of requisite skills and capacity to engage the demands associated with credit ratings and assessment. Thus there is a need for tailored technical assistance and capacity building for these countries. We commend the efforts currently being undertaken by the United States nations and the African Union to strengthen capacities of African countries. South Africa also supports proactive and transparent engagement between member states and credit rating agencies. This does not mean trying to influence CRAs unfairly.

It simply means sharing accurate information, explaining policies clearly, and correcting misunderstandings early. It is also vital that CRAs on their part approach such engagement as a two way process. Greater openness to feedback from sovereigns on methodological assumptions and data interpretation will enhance trust and improve analytical robustness. As we heard from some of our panelists, countries that articulate a coherent policy vision and demonstrate institutional continuity tend to build greater confluence with agencies over time, even during periods of economic stress. Active participation by developing countries in international forum and engagement with investment and market participants can also strengthen transparency, information flow and credibility.

Such platforms allow for an exchange of information and experiences and learning about expectation. In this connection, the establishment of the borrowers platform will also assist developing countries with peer learning and increasing technical assistance and capacity building in dealing with and or manage their debt so as to draw investment with the ratings. I thank you, Mr. President.


ECOSOC · Vice-President [3:17:10]:

I thank you and I thank Ms. Bigel for guiding the discussion. I also thank our distinguished panelists for very substantive contributions and delegations for participating in a productive exchange of views while behind the schedule.

Unfortunately, so I briefly paused the meeting to allow the podium to be rearranged for the closing segment. Please remain seated.

Distinguished delegates, we have reached the closing segment of this meeting. I now invite Ms. Lee Junhwa, under Secretary General for Economic and Social affairs, to make a statement. Mr. Lee, you have the floor.


DESA · USG DESA · Li Junhua [3:18:53]:

Well, your Excellency, the Vice President of the ecosoc. Excellencies, distinguished delegates, colleagues, it is an honor to conclude this first ECOSOC special meeting on credit readings. My sincere appreciation goes to all the participants for today's constructive dialogue. Actually, we meet at a very truly pivotal moment. With the 2030 Agenda deadline rapidly approaching, to us, the financing gap remains an imposing barrier.

Overcoming this requires reducing the cost of the capital in developing countries, a difficult challenge demanding reform across the international financial architecture. Credit assessments and readings remained a crucial part of this solution. Today's discussion has highlighted the key role that the credit ratings played within the international financial architecture. Readings provide essential information inference, how market access risk and therefore impacted how countries and companies access the financing and at what cost. Credit readings affect not only sovereign borrowing costs, but also financing conditions for businesses and investors.

They influence the broader flow of the investment essential for sustainable development. The three core themes explored today that have provided valuable insights. First, participants examined the relationship between the credit readings and the cost of the capital. While the readings provided important information to the markets, concerns were also raised about how reading options can amplify volatility or prosicality during crisis. We heard a clear code for the more nuanced, less mechanistic approach to evaluating sovereign risks.

Second, the discussion on the methodologies highlighted the importance of adapting the analytical approaches to an evolving world. Speakers emphasized the value of the long term perspectives, enhanced data, rigorous scenario analysis. Under greater methodological transparency, we should move past the near term the snapshots to cultivated markets that address the climate related risks, understand resilience and prioritize sustainable investment. Third, participants stressed the importance of strengthening developing countries capacity to engage effectively with credit rating agencies under the financial market actors. By building robust statistical systems, analytical expertise and stronger communication strategies, countries can better present their economical fundamentals and strategic development strategies.

Dear colleagues, we are navigating exceptionally turbulent times. While the multilateral system confronted fierce headwinds, multilateral engagement remained vital. Today we have brought together credit rating agencies, Member States, investors and the key stakeholders. This gathering at the United nations embodies our shared conviction, namely, the international financial architecture must deliver for all countries, not merely the most credit worthy. This mindstorm marks the first of the recurring dialogue.

My department, the UN Department of Economic and Social affairs, will continue to assist the Member States in advancing this critical conversation, supporting ECOSOC in delivering impactful, meaningful contributions moving forward. Let me once again congratulate all participants on the collaborative and constructive spirit defining today's successful meeting. Thank you.


ECOSOC · Vice-President [3:23:18]:

I thank then the Secretary General for Economic and Social Affairs. I will now deliver my closing remarks. Distinguished delegates, let me also thank participants once again for rich and thoughtful discussion and to thank the interpreters and staff for their support. Today's exchange has clearly demonstrated the value of bringing together Member States, credit rating agencies, international institutions and other stakeholders in one room. This kind of dialogue is essential.

We have heard that credit ratings play a critical role in shaping countries cost of capital and access to finance. At the same time, today's discussions highlighted the importance of transparency, improved methodologies and possible ways forward to incorporating longer term consideration in sovereign risk assessment. It also updated Member States on the work of the Secretary General and on the interesting ongoing work, particularly in Africa, to develop institutional innovations. A key takeaway is the need to strengthen dialogue between country authorities and market actors, including credit rating agencies. Such engagement can foster mutual understanding and help improve the overall quality of sovereign risk assessment.

Regular exchanges can help those informational gaps regarding government policies and international initiatives, including participation in debt relief or or restructuring programs. Importantly, we also heard about need to capacity building to ensure Member States are able to make available the most complete and timely information for assessment and for investors. This is particularly important for smaller and less visible economies which may face additional challenges in communicating reforms, policy changes or participation in international initiatives. The meeting also mark an important step forward institutionally. Member States decided in the Sevilla commitment that this meeting should be held recurrently.

ECASOC has agreed to convene this dialogue biennially. We will therefore meet again in 2028, building on the progress made here as we move forward. The insight shared today will be reflected in the President's summary and will contribute to ongoing discussions in the Financing for Development progress, including the upcoming ECA SO Financing for Development Forum and SDG Investment Fair. Let us continue to use ECA soak as a platform for constructive engagement, helping bridge perspectives and support a more effective and inclusive international financial system. I thank you all for the participation and I declare the Special meeting of the Economy Consortium Social Council on Credit Rating as concluded.

The meeting is adjourned.