The EU has urged a clampdown on ratings agencies, including a ban on ratings for countries under international rescue schemes, but some analysts are wary of moves to slay the messenger of bad tidings. In Brussels, Internal Markets Commissioner Michel Barnier said he would ask Poland, which currently holds the rotating European Union presidency, to put a battle plan to rein in the agencies to EU ministers soon. "We must first and foremost be more demanding on ratings of sovereign debts," he said. "We see each day the effects on the countries concerned: a hike in the cost of credit, weakened states, possible contagion to other economies." Read more: http://www.smh.com.au/business/worl...gs-agencies-20110712-1hb58.html#ixzz1Rpk5QT00
Yeah, that sounds like a good plan, lol. How the fuck are they going to stop freedom of speech for rating debt? How is shooting the messenger going to help? Last time I checked, censorship didn't improve a balance sheet.
The "clampdown" should be in the form of introducing more competition... like giving European rating agencies more say in risk assesment as far as European financial regulations are concerned. On a second thought, Basel II is this kind of clampdown. Each bank in a country that implemented the Accord (this includes all EU countries, New Zealand and a few others but not the US) has to maintain their own risk assessment methodology independent of credit rating agencies. In other words, Europe pretty much gave up rating agencies already. It's the US where the role of the rating agencies is still enforced in multiple pieces of legislation.
Good grief. All that does is slap a "default" tag on anybody who is "not allowed" to be rated. Seems like a pointless idea to me.
Person "A" is committing a crime...Person "B" reports that Person "A" is committing a crime...Person "B" is wrong??????? Person "B" is the problem????? WTF!!! How many people would have bought GM bonds before the bailout...had they known the haircut the US GOV'T was going to give them? This seems like a way to screw people behind their backs..."Oh, yeah, Mr. Ratings Agency...you may know that a certain country is in deep sh!t, but you can't tell anybody...oh, and never mind that we will tell our friends to stay away from that crap...let the American 401k plans buy it!"
Hilarious that in the era of Wikileaks and file-sharing, some moronic EU bureaucrat thinks you can actually stop people from rating debt. Here, I'll rate debt now - Greek debt is junk, so is Portugal's, so is Ireland's. So sue me!