American Credit Rating Agencies Lose Influence (Financial Times Deutschland, Germany)
Are the once all-powerful credit-rating agencies, the most important of which are American – becoming irrelevant to the markets and those who invest in them? According to this editorial from Germany’s Financial Times Deutschland, despite the fact that Standard and Poor’s threatened to downgrade eurozone debt last week, European markets have hardly moved.
Tuesday’s experience with the powerful rating agencies permitted us to observe an interesting phenomenon. Standard and Poor’s was already threatening a possible downgrade of “AAA” countries in the eurozone (yes, Germany as well!) and of the European bailout fund along with it. And what happens? Nothing – or at least very little. The markets merely signal: We already know all that. And even Europe’s politicians, peeved as they are – are shrugging it off: yeah, yeah, the rating agencies – they’re just one voice among many. At most, S&P’s threat is an additional incentive for the upcoming Euro summit. Oh, right.
So what’s going on here with the rating agencies? Does bad news have less of an impact now that the big euro-apocalypse is predicted daily? Or is the oligopoly of rating giants discrediting itself because their operating methods are increasingly met with skepticism?
Both are the case.
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