ESMA (European Securities and Market Authority) has identified deficiencies in the process of the 3 main ratings agencies related to sovereign ratings (S&P, Moody's, Fitch). (
EN). Fine up to 20% of turnover (
ES) or (
ES).
ESMA identified deficiencies and issues for improvement in the following areas:
- Independence and avoidance of conflicts of interests;
- Confidentiality of sovereign rating information;
- Timing of publication of rating actions; and
- Resources allocated to sovereign ratings.
Curious to see how this will evolve. Around summer 2012, ratings agencies had an active role in the EU sovereign crisis. I guess it is payback time, on topics easy to prove.
Ratings won't be fair till the E.U. gets its own ratings agency. The closest is Fitch but that's 50 % U.S.-owned. Any attempt at impartiality is severely punished by the U.S. authorities: When S&P downgraded U.S. debt in the summer it triggered an SEC investigation on the spurious and wholly erroneous excuse that there was suspicion of insider trading! Anyone would think S&P had contravened the Patriot Act!
ReplyDeleteThe Chinese ratings agency Dagong downgraded the U.S. to A-1 a few weeks ago, but few took notice. They would take notice if a newly created European agency did to the U.S. what the U.S. did to Europe over the past 5 years in an attempt to scare investors into fleeing to the U.S. "Safe Haven".
The country ratings of U.S. agencies are rubbish, as are the BLS Unemployment Rate and the U.S. Treasury's manipulated GDP growth data.
The E.U. needs to start packing a punch, not just with an indigenous ratings agency but with an E.U. Credit Card. It's hard to believe that 320 million E.U. citizens don't even have access to an E.U. Credit Card, a situation which only benefits U.S. corporations. The E.U. is a lion that thinks it is a sheep.