Europe threatens 'mad' ratings agencies

The leading credit ratings agencies were threatened with tighter regulation and break-up yesterday by some of Europe's most powerful politicians.

The German finance minister, Wolfgang Schäuble, said he could see no justification for Moody's recent downgrade of Portugal's debt and believed that limits should be put on the rating agencies' "oligopoly" – the scene has been dominated for decades by the big three: Moody's, Standard and Poor's and Fitch.

Mr Schäuble praised Lisbon for its record on implementing its austerity package and economic reforms after a €78bn (£70bn) bailout in May.

Jose Manuel Barroso, the president of the European Commission, claimed Moody's downgrade of Portugal added to speculation in the markets and suggested an anti-Europe bias. The European Union, he said, planned to strengthen regulations overseeing the three majors, and said European legislators would also look into issues of "civil liability" for incorrect judgements by agencies on the credit worthiness of sovereign European nations, with an obvious focus on those currently under severe pressure – Greece, Portugal, Ireland and, to a lesser extent, Spain and Italy.

"It seems strange that there is not a single rating agency coming from Europe. It shows there may be some bias in the markets when it comes to the evaluation of specific issues of Europe," he said.

The Greek foreign minister, Stavros Lambridinis, said the agencies' actions in the debt crisis had been "madness". The fierce attacks on the agencies' integrity came after a shock downgrade of Portuguese debt to "junk" status by Moody's sent stock markets and the euro sharply down, and sparked fears of another round of contagion. Momentum is growing in European official circles to establish a new EU-based or sponsored ratings agency to rival the established firms, though there are doubts about how credible such an organisation might be.

A statement at the end of last week by Standard and Poor's that it would treat even a voluntary roll-over of Greek debt by private bondholders as a "selective default" in effect scuppered eurozone efforts to secure a new rescue package for Greece in co-operation with the commercial banks.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy