China agency warns of collapse in euro confidence

Chinese ratings agency Dagong has warned that Europe's debt problems would cause a collapse of confidence in the euro, and predicted a worsening of the global financial crisis this year. The agency said the world's economic woes would grow more severe in 2012, with the sovereign debt crisis developing into a "currency crisis" as investor confidence in the euro continued to suffer.
"The credibility of the euro will fall, leading inevitably to a sell-off as foreign confidence in the single currency collapses," Dagong warned in its 2012 Global Sovereign Credit Risk Outlook, published on Wednesday. Dagong has relatively little influence outside China, but it has made headlines by accusing better-known agencies Moody's, Fitch and Standard & Poor's of causing the 2008 financial crisis by not properly disclosing risk.