After all these turbulences in the financial markets, there is increasing criticism of rating agencies that assess the creditworthiness of banks, companies, and even states. For this reason, the European Commission is seeking their oversight, writes Deutsche Welle.
Triple A is the best rating for creditworthiness that banks or states can receive and which is shared by rating agencies. The ratings for Greece and Španjolsku have deteriorated, and due to the downgrade of Greece’s creditworthiness, followed by Španjolsku, the debt crisis in these two countries has become even more dramatic. From a rating of B+ onwards, government bonds are worthless. In creditworthiness assessments, the leading role is held by rating agencies in the USA and the UK, primarily Standard & Poor’s, Fitch, and Moody’s.
Who controls these agencies that sit in the USA and the UK, thus outside the eurozone? In Europe, this task is performed more or less without great success by national financial supervisory authorities. This is what the European Commission now wants to change. According to the proposals of Michel Barnier, the Commissioner for Internal Market and Services, a new European market oversight body will henceforth control the rating agencies that national institutions have evidently been unable to rein in until now. The European oversight body will be authorized to initiate investigations if rating agencies make questionable assessments. It will be possible to request documents, hear the accused, and impose penalties. (Deutsche Welle)
