Europe Launches Ban on Criticism By Scrapping Use Of Rating Agencies

Is you country bankrupt.

Can't borrow money because those nasty ratings agencies keep telling everyone
you not got a pot to pee in let alone got the cash to pay back a multi billion euro loan.

Then the EU is coming to you're rescue.

EU LAWMAKERS APPROVE AMENDMENT TO END USE OF CREDIT RATINGS

It seems just a few years ago, when these very same ratings agencies were raising ratings and supporting banking systems, mortgage provision, and sovereign-inclusions-into-monetary-unions, that the political elite could not showing off their bronzed statues of AAA/AA-ness.

But how will you know which country to invest money you ask.
Well the EU will help with that too.

LAWMAKERS CALL FOR EU TO ISSUE SOVEREIGN CREDIT RATINGS

So the EU will tell you everything fine and don't worry about anything as europe will
rate itself as AAA++(++++++).

Zerohedge

Bloomberg EU Lawmakers Seek to Scrap Credit-Ratings Rotation Plan

reply to post by skuly


Remind me of the USA. How we "calculate" unemployment. Like everything else involving government its just a ponzi scheme.

Oh they quit looking for a job because the economy is a joke. Yay, we get to take him off the unemployment numbers.

Ever seen the movie "Inside Job"?
Interesting scenes there with management of the big ratings agencies who basically admit that the ratings are politically driven and just an "opinion" basically based on nothing.
Hell, if it actually meant anything, the big US investment banks and the US as a whole would probably have a -FFF rating right now.

The ratings system is just used as a leverage / bullying tactic to get other states to play ball with the financial elite, or face a downgrade. Anyone who believes the ratings present an accurate picture is delusional.

reply to post by Britguy


Mmmm I can see your point but I do think they have some validity. The credit rating agencies take many things into account, not just a countries balance sheet. Political stability, economic outlook, global status are all included in the ratings.

You mentioned the US would be a FFF. In theory I get what your saying. The USA is in debt that can never be paid back. BUT what country would be a better investment right now if you were buying Treasuries? No place in Europe.... China is developing but its certainly not the model of anti-corruption or trust....

Whats a better investment than the US? Despite all its problems

These are the ratings agencies that are partially responsible for the global economic collapse. These rating agencies were giving tripple A status to subprime mortgage debt, then passing it on to insurance and pension companies, who only buy tripple A. They gave the green light to sell this junk and destroy the pensions of millions around the world.

The whole system needs a clean out. With those found guilty charged for their crimes.

reply to post by KnawLick


When the ratings agencies are in bed with the same people running the ponzi schemes, it makes a mockery of the idea of independent assessment.
It's simply used as a tool to create a false impression of stability, or otherwise, when in fact the whole global system has been corrupted and destroyed by those very same people helping to create the ratings, which in themselves are part of the problem as they are used to cover up failing systems for the bankers gain.

It's all a rigged game, with those involved all part of the same corrupt system. Even those tasked with overseeing it's legality and regulation are themselves appointees from the very organizations they are meant to regulate! It's crazy!

reply to post by Britguy


I see what your saying and agree.

My point is, What countries WOULD get a AAA rating by your definition?

reply to post by skuly


They're all BANKRUPT anyway.
There is NOTHING to rate.

Originally posted by 0DeepSpace0

They're all BANKRUPT anyway.
There is NOTHING to rate.

That was one of the more intelligent posts I've read in ATS for years, and in 2 friggin lines! Bravo!

Who can pay for the derivatives and insurances of OVER LEVERAGING of more than $700 Trillion dollars today, more money and resources than the world have today?!!!!

But stll, at least some independence from those private accounting companies, definately much better than EU legislators whom have MORE to hide. to fool depositers.

The financial crisis may not had been caused by EU as those idiotic bankers in G20 tried to make lame excuses, BUT it was the SAME bankers and banking industries around the world that had caused the crisis due to their recklessness and abuse of trust. Accountability has come. NO MORE to privatising of profits and socialising of debts! They must be paid for their crimes against humanity by debt enslavement!!!

How do you get investors from smelling the crap your about to sell them?

The EU answer is to remove their sense of smell and apply your own perfume.

Honestly if you look at the debt ratios and then look at the credit rating should alone be enough information that rating agencies are just full of dung!

HA HA HA HA HA

Good.

Whether it's Moody's or the other agencies, the "ratings" are not supposed to be objective, factual analyses.
They are simply supposed to increase profits.

So I'm glad to see that people are starting to ignore them.

With the long term push towards deregulation, the rating agencies where a capitalist solution to providing much needed oversight to corporate operations. Yeah they messed up bad and helped kick of the GFC, but without them we are left with no one watching these titans, and we all know how rough they they can play.

Nationalizing the credit ratings does have an advantage in providing government oversight to corporate operations and can help remove some of the conflicts of interest that take place through private run operations. In a way it is a step back to government regulation, but with a new economic model to work with as private regulation is showing a lot of cracks. There will still be a lot of people that come from the corporate world working in a government rating agency just because they know how the machine operates. But working under a government body can give some extra security, access, independence and enforcement compared to private run operations.

This will not remove all conflicts of interests that do take place. But considering how corporations where some what more behaved under government regulation compared to deregulation, this can be an important step in returning some sanity to the economic mess we are all in.

Considering just how ruthless the corporate world can be, the more watches we have the better so there is still a chance to plug some cracks that other agencies miss. If a government rating agency is going to be set up it will take time to properly resource and establish the links necessary to operate effectively. As for the other rating agencies, I would just leave it to market forces if they are to stay in business, their business is integrity so if they spew out lies their time will soon end. If they get it right we need all the help we can get to tame these giant entities.

Surely, in this "trickle down" type of world we live in, if the nations can throw off the shackles of poor credit ratings, We The People can do the same?

Just imagine how many loans can be written to people who can't afford them now!!!

Yet somehow I doubt that this will trickle down much.

reply to post by skuly


That doesn't seem like a "ban." Just because they are scrapping their use doesn't mean others can't still get independent ratings does it? Are they actually putting the rating agencies out of business and banning their usage, or just changing their own policies?

Zero Hedge isn't saying what the other news agencies are. It's like they didn't finish the sentence.

EU LAWMAKERS APPROVE AMENDMENT TO END USE OF CREDIT RATINGS

What Bloomberg says:

EU Assembly Seeks to Scrap Most of Rating Plan
European Union lawmakers voted to scrap most of a proposal to force businesses to rotate the credit-ratings company they hire to assess their debt, while backing tighter restrictions on sovereign-debt ratings.

These are NOT the same thing.

They continue:

]The European Commission, the 27-nation EU’s regulatory arm, proposed the rotation rule last year as part of a draft law to toughen regulation of the ratings industry amid concerns that some of its decisions exacerbated the euro-area debt crisis.

They aren't getting rid of credit rating agencies at all.

Originally posted by getreadyalready
reply to post by skuly

 

That doesn't seem like a "ban." Just because they are scrapping their use doesn't mean others can't still get independent ratings does it? Are they actually putting the rating agencies out of business and banning their usage, or just changing their own policies?

Going by this bit.

For sovereign debt, the parliament’s amendments would require ratings companies to pick two to three dates a year for issuing assessments, with publication outside these dates subject to approval by the European Securities and Markets Authority.

Such ESMA approval would only be forthcoming in cases of “exceptional and unforeseen circumstances,” according to the text of parliament’s amendments.

The lawmakers also sought to bolster the commission’s proposals by calling for a ban on mergers between large ratings companies, and for all references to credit ratings to be repealed from EU financial regulation.

A agency could only change a country rating twice a year any other time it would need
to ask permission from the European Parliament to change it.If they say no then the
agency can't.

How they would enforce this outside europe is anyone guess.

Anonymous needs to destroy all the credit rating agencies and the companies and rich bitches who support them to manipulate lives. The only revolution these crooks will understand is financial. Do over.