Is Islamabad safer than Athens? It surely isn’t, in terms of physical security. But as for the financial risk, big credit rating agencies say that it is safer to lend money to the Pakistani government rather than to the Greek government.

That is the general meaning of the junk (CCC) status given to Greece by Standard & Poor’s (S&P), one of the three major credit rating agencies in the world. Portugal (BBB-) is also not far above from Pakistan (B-).

European politicians are angry about this treatment. Some of them think it’s an unfair and biased evaluation of the region’s fiscal status by the American firm. But the main problem is that a downgrade in credit worthiness index can itself be a reason for financial instability, as this kind of announcement tends to be a self-fulfilling prophecy.

Korea knows the risk of this trap too well. During the Asian crisis between 1997 and 1998, Moody’s lowered Korea’s ratings six notches to Ba1 from A1; S&P by 10 notches to B plus from AA minus; and Fitch by 12 notches to B minus from AA minus. Following these guidelines, many foreign investors pulled out their investment. Dollars dried up quickly from Korean banks and firms. Pains followed in the form of job cuts, bankrupt companies and a soaring suicide rate.

Some 13 years on, the attitude has changed. The Ministry of Strategy and Finance boasts every time it receives A-something ratings from the three firms. The ministry, as well as the Bank of Korea and the Financial Services Commission, hold annual IR meetings with each of them, to offer inside information about how Korea has become a safer place to invest than the previous year. The ministry issues self-congratulating press releases after every announcement from the agencies.

“The global rating agencies are a window to global investors,” in a defense of the meetings, a senior official at the finance ministry said on July 4 in a briefing to reporters, on the condition of anonymity. “The meetings are beneficial to them, and to us. Helping them to understand Korea better will help us in turn.”

Sure, with good ratings, the Korean government and its businesses can borrow money cheaper in the international financial market. It also makes officials in charge look good and feel good. But this is against what the government promised in the meetings of G20 nations last year, where Korea played the host. At that time, the heads of the world’s 20 most important economies had agreed that the dominance of only three American-based firms in the ratings industry was significantly harming the health of global finance.

Thus, they came up with a joint statement (communique) in Gyeongju in October that the G20 will “reduce reliance on credit rating agencies” as much as possible. They also said that authorities should remove or replace the ratings by those agencies by suitable alternative standards of creditworthiness. “It is particularly pressing to remove or replace such references where they lead to mechanistic responses by market participants,” the statement read. Therefore, China, Russia and some European countries began to support locally grown agencies.

Maybe Korean representatives did not fully understand the meaning of the statement when they signed it, or they are just ignoring it for the sake of short-term national benefits. “Mechanistic responses” are continuing here in the form of annual, exclusive meetings with the three — Moody’s in May, and S&P and Fitch in the second half of the year. This gives them access to exclusive information on government policies that their smaller rivals and ordinary investors cannot have.

This asymmetry of information is not in line with Korea’s commitment to G20 agreements. Nor is it necessary anymore. Korea is not short of foreign financial investment and its dollar reserve is large enough. The government is introducing various regulatory tools to discourage foreigners’ short-term investment and banks from borrowing from abroad. At the same time, it is asking for better ratings from the big rating agencies. What an irony.

Entertaining those three firms is not the best way to stabilize the cross-border flows of money. It would be in the interests of Korea as well as global financial stability if the government provides a level ground and equal information to all market participants. Let’s all ratings agencies compete in a fair and free market with no extra treatment. Unlike the finance ministry official believes, what is good for the big three can be bad for Korea and the global economy in the long run.