Der Speigel is reporting that the Euro zone finance ministers want to 'curb the power' the ratings agencies.
Now European Union governments are planning to take measures to break the dominance of the main rating agencies, according to a report in the Wednesdayedition of the German business daily Handelsblatt.How? Well this is how,
The newspaper reports that euro-zone finance ministers are pushing the European Central Bank (ECB) to set up its own sovereign rating scheme for the 16 members of the euro zone so that it no longer has to rely on private rating agencies, such as Moody's.
Now hold on a moment, why would anybody take them seriously? Private ratings agencies are only as powerful as the trust vested in them. If they make a stuff up, or get it wrong like the EU's elite are saying, then the markets downgrade the value of their information and thus the value of the company and so on. That is how the knowledge economy works.
However we all know that the Eurozone's political masters lie in order to get their way. Thus we are in the problem we are in today, because despite everybody knowing that Greece was fiddling its books in order to join the euro (stop sniggerring in the back there Italy you know that this refers to you as well) they said nothing. Or worse they went along with the fraud.
Now they expect the markets to believe them. Extra-ordinary
They really are from cloud 'plain stark raving crackers'.
And to blame this on the fact that Moody's are retaining an A2 grade for Greece and thus hold that counties future in their grubby coporate hands, and that Moody's are largely owned by Warren Buffet an 'American' must really piss them off. But of course Standard and Poors and Fitch have already downgraded Greece. So you can hardly blame Moody's.
And to attempt stop this state of affairs by setting up their own system is delusional. The only way to stop this is throw off the shackles of the single currency and the legion of anti-competitive legislation and regulations that pour from the Brussels maw like cheese from an over-ripe brie.