20th June 2011
The issue is further complicated by the fact rating agencies hold unprecedented power over nation states. The Eurozone crisis may be one thing but even the USA has seen the agencies fire ‘shots across the bows on its credit rating.
The Telegraph writes: “The Securities and Exchange Commission is examining whether Standard & Poor's (S&P) and Moody's were too reliant on out-of-date information and failed to conduct adequate research when assessing the creditworthiness of mortgage debt, the Wall Street Journal reported.”
The agencies are deemed by many to have been at fault for rating all sorts of mortgage backed securities as excellent investments, when the housing market downturn in the US proved them to be nothing of the sort and some of them to be worthless.
But UK regulators seem happy to pass the burden for regulation to the European Union and there are few signs of court action here.