The IRDAQ II (International Rating Digital Automated Quotation II ) is the first real time credit rating system and strives to function as a neutral and uniform financial instrument for the public sector, which will support the stability of financial markets by a clearly defined and fully transparent algorithm.
An accurate and precise evaluation of a country will be reached with the help of relevant factors and internal computational models which may then be viewed as the final evaluation for all evaluations by the rating agencies.
The algorithm, which offers a continuing update of evaluations in light of changing economic data, will for the first time provide an insight into the developing process of an evaluation. Thanks to this method, there won’t be any more contentious short-term ratings or a sudden downgrading by 4 steps, while the exact evaluation process will be documented and evident in detail.
It is another goal of this rating system to progressively and purposefully reduce the dependence of the financial regulatory system on the market leaders of the rating industry as much as possible within a rational time frame, while their credit ratings will be proportionally considered in the IRDAQ II algorithm.
The flexibility of IRDAQ II not only enables a redistribution of rating agencies’ market shares, but also a deliberate path of coexistence of rating agencies.
Currently in supervisory phase, the system is already widely used by governmental finance and surveillance entities and is considered to be ready-to-market.
The importance of the IRDAQ II has already been highlighted by a notable number of government officials and industry leaders.
Since its governmental introduction in 2009, the IRDAQ II has predicted all down- and upgrades of traditional credit rating agencies and is prognosticating the future performance with an unmatched precision.
More recently, the IRDAQ II has anticipated Argentina’s default in August 2013, which is almost one year in advance of the actual payment default.
An accurate and precise evaluation of a country will be reached with the help of relevant factors and internal computational models which may then be viewed as the final evaluation for all evaluations by the rating agencies.
The algorithm, which offers a continuing update of evaluations in light of changing economic data, will for the first time provide an insight into the developing process of an evaluation. Thanks to this method, there won’t be any more contentious short-term ratings or a sudden downgrading by 4 steps, while the exact evaluation process will be documented and evident in detail.
It is another goal of this rating system to progressively and purposefully reduce the dependence of the financial regulatory system on the market leaders of the rating industry as much as possible within a rational time frame, while their credit ratings will be proportionally considered in the IRDAQ II algorithm.
The flexibility of IRDAQ II not only enables a redistribution of rating agencies’ market shares, but also a deliberate path of coexistence of rating agencies.
Currently in supervisory phase, the system is already widely used by governmental finance and surveillance entities and is considered to be ready-to-market.
The importance of the IRDAQ II has already been highlighted by a notable number of government officials and industry leaders.
Since its governmental introduction in 2009, the IRDAQ II has predicted all down- and upgrades of traditional credit rating agencies and is prognosticating the future performance with an unmatched precision.
More recently, the IRDAQ II has anticipated Argentina’s default in August 2013, which is almost one year in advance of the actual payment default.
Due to the complexity that is the substance of the IRDAQ II, a variety of six autonomous and arbitrative sub-indices (SDAQs) have emerged to enhance the precision of the rating.
Among others, these include:
- The MESTIX (MacroEconomic Stability IndeX) defines the macro economical capabilities and stability of the country.
- The POSTIX, a Political Stability IndeX, determines the risk of a political change and its possibly negative impact to the country. This index has shown to be an excellent indicator and secure instrument to reduce the risks on emerging markets as well as developing countries.
- The AUSIX (AUtarchic Stability IndeX), measures the maximal autarchic independence of a sovereign country and is regarded to be an indispensable tool for negotiations on a governmental level.
