Credit ratings have consistently been identified as critical components of the modern international financial architecture, playing a vital role in addressing market information asymmetries and facilitating investment. By guiding creditors with judgments on relative default risk, ratings influence the volume, cost and stability of access to market financing for countries worldwide.
Recent global economic challenges – rising interest rates, increased sovereign borrowing costs, a wave of sovereign defaults, and developing countries' growing reliance on private markets – have placed credit rating agencies (CRAs) at the centre of development finance discussions. The 2024 Pact for the Future specifically noted UN efforts to engage with CRAs, and credit ratings have featured prominently in ongoing Financing for Development discussions leading up to Fourth International Conference on Financing for Development (FFD4).
The First Draft of the FFD4 Outcome Document highlights several priority areas for reform, including enhancing methodology transparency, recognizing the benefits of voluntary debt restructurings, revising the sovereign ceiling rule, reducing over-reliance on ratings, and strengthening inclusive dialogue through a potential UN-led structure.
Building on this momentum, this invitation-only side event, held during the Fourth Preparatory Committee for FFD4, brings together key stakeholders from across the credit rating ecosystem to explore how ratings can better support financing for sustainable development (additional speakers to be confirmed).
Our discussions will focus on:
- Understanding sovereign ratings methodologies.
- Identifying challenges and opportunities for mobilizing private capital toward the SDGs.
- Examining current regulatory frameworks governing credit rating agencies.
