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Thursday, 29 April 2010

Rating agencies: Who made them so powerful?‏

"Perhaps I am being over-squeamish, but it doesn't feel democratic or sustainable that the fiscal fate of nations and currency zones - and indeed the perceived strength of the financial system - rests on the analytical verdict of three private-sector research firms, the financial record of which has in recent years not been unblemished. "

Indeed. I'm not convinced by the need for greater competition. It may well be the best answer, and maybe the Bank of England, European Central Bank etc. may need to take over this role. The conflict of interest is staggering, and their awful record with regards to the recent financial crisis means they did their jobs far worse than national governments, yet the governments pick up the bill while S&P etc. carry on stuffing themselves with the good shit. It's an excellent example of where the power really lies in the world because there's not a damn thing most people can do about it, but we are the ones who pay. And who will take them on? no-one I fear

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