Tories condemn bid to ban credit rating agencies
Posted, October 25, 2011 @ 12:00
Conservative MEPs have condemned "arrogant and fanciful" plans by the Eurocrats to ban credit-rating agencies (CRAs) from delivering their verdicts on EU states.
Under a proposal expected to be unveiled by the European Commission tomorrow (Wednesday), the EU´s financial markets watchdog, the ESMA (European Securities and Markets Authority), would be handed powers to stop publication of credit ratings of countries that need a financial rescue programme.
Ashley Fox MEP, who has fought previous European measures to interfere with the independence of CRAs, said the proposal was a classic case of shooting the messenger.
He said: "This is no more than an attempt to ban bad news and criticism. CRAs simply offer an opinion. No one is compelled to pay any attention to it. But of course the markets do pay attention because, on balance, the opinion is carefully-considered and usually accurate.
"I cannot imagine how a ban would work. After all, the CRAs are based in America, so for Europe to attempt to gag them would be both arrogant and fanciful.
"CRAs are an integral part of the financial system and this ban is a clear attempt to stifle the the free flow of financial information and to silence open economic debate. In the long run, that can only depress investor confidence further.
"Of course what the Eurocrats really want is to have their own credit rating agencies. That way even Greece could have AAA rating. The only problem is the markets would never buy it."