Even before the crisis is over Greece's role and discusses power of rating agencies. The financial crisis has shown clearly that the valuation of companies and countries do not have much to do with the real economy. That such agencies anticipate events in the economy, is being questioned more and more.
Lutz Getzschmann
late April caused the rating agency Standard & Poor's (S & P) with its downgrading of the creditworthiness of Greece, Spain and Portugal almost a panic on the European financial markets. So they brought the Greek government in trouble, which was downgraded by no longer able to credit receive in financial markets at reasonable terms. It illustrated that but also how vulnerable financial markets and monetary systems.
It is probably not far wrong with the assumption that the agencies followed the economic interests of their clients, the big financial companies. The new rating by S & P for Greece came to the worst possible time, just as the EU assistance package was put together. Then the risk premiums on government bonds shot to a record level. Sure, you might think that gasoline prices are rising, too accessible to the holiday begins. But in terms of rating agencies, there are other expectations, on illusory perceptions of their neutrality and integrity are based.
Rating agencies are actually nothing more than private companies, create the analysis on the economic situation for large borrowers. Three agencies in this area has a market share of 95 percent and thus a position of power which gradually hardened opponents of the regulation of financial markets is scary. Fitch, Moody's and S & P effectively control access to financial markets. Who wants to always be there include debt, previously required a rating. The agencies shall designate the probability that a creditor receives his money back.
The higher the security, the easier and low-interest, a State or a company to borrow money. The worse the rating, the more interest the creditor collects for its higher risk. Since rating agencies associated often with the companies evaluated via personal and business relationships, the reliability of the ratings, especially in recent years of crisis question was made. This tendency is reinforced by the fact that the rating agencies directly for the evaluation of investment products by financial companies commissioned and paid for.
States also will be evaluated by the agencies, and a downgrading of the creditworthiness can easily have disastrous consequences to the national bankruptcy. As with the evaluation of companies, the rating of countries have clearly more to do with pleasure or prejudices than with real economic processes. Thus, in the current sovereign ratings Greece now about the same status as Pakistan. Venezuela, despite its oil reserves with a grade of BB on the priority list of potential investors slipped pretty far down, while Japan, which is 210 percent of its gross domestic product actually quite in debt, is still valued by the relatively good grade AA.
difficulties could also recent rating paragons of Germany and France . Get So far they all large agencies had given the top grade AAA. This is now in danger after the two EU-led forces with the 750-billion rescue package for € pretty much have leaned out the window.
"worsened by the package, the debt profile, which could" threaten the credit ratings of core states, Stefan Kolek, a strategist at UniCredit said. It would involve "a kind of pyramid scheme," the highest level.
The practices of this center of power have been caused widespread criticism. Your blue-eyed mispricing of high-risk real estate funds in 2007 also had a share in the U.S. housing crisis the world's financial markets seized shortly.
As mid-May it was announced that New York prosecutors launched investigations against several major banks, including against the German bank. The institutes are suspected to have moved by rating agencies false information to a better assessment of their mortgage-hedging.
Apart from the German bank is also against Goldman Sachs, Morgan Stanley, UBS, Citigroup, Credit Suisse, Merrill Lynch and Credit Agricole determined that is now part of Bank of America. At the most out trick agencies are S & P, Fitch and Moody's. In addition, several cases examined, in which bank employees hired away the agencies and then they set to the controversial mortgage packages.
The New York Times reported in late April, banks would have formulas concern of rating agencies in order to influence their evaluation mechanism. Here, therefore, if substantiated, the allegations should cut mocks all global players in the financial sector mutually planned and fully conscious over the ear and gambled so in a way that any alleged capitalist rationality.
In the case of the Lehman bankruptcy were credit rating agencies come under criticism because it the bank's situation completely wrong were assessed. They will also be made responsible for the extent of the financial crisis. They should in the structuring of financial products have been helpful and have these products are subsequently evaluated for selfish motives with top marks. It also becomes clear that it takes always two to cheat and the rating agencies do not quite helpless victims of unscrupulous financial sharks, but himself with his own economic interests in the speculative transactions were involved.
After the demotion of the EU's southern flank by the two American and one British agency just prior to the adoption of the Greece-aid package showed the governments in Berlin and Paris is anything but pleased. The EU Commission should consider to make "proposals to increase competition among rating agencies," Angela Merkel and Nicolas Sarkozy asked in a joint letter to EU Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso. In plain language this means that they would like a counter-weight by the rating agencies to confront the interests of the country € loyal.
Peter Bofinger, the alibi-Keynesians among the "economic experts" wondered in an interview recently to: "The three major rating agencies have so far failed massively in every crisis. Nevertheless, they shall be has not yet been held accountable. Their entire business model is highly problematic, because they adhere to a not for its assessment, and, second, no real competition between them. The establishment of a European non-profit rating agency would thus urgent. "
The U.S. Senate will however take the Agencies to the short lead. An amendment adopted in the Senate on legislation on the financial calls for the creation of a national clearing house, whose policies would have to meet the agencies. Similarly, decreed that government agencies in assessing financial risks are no longer alone should leave the reviews of the private sector active rating agencies. The U.S. authorities should develop their own mechanisms for assessment of creditworthiness.
Furthermore, the Senate wants to ban the banks to pick itself, which rating agencies should evaluate their financial products.
At least in Europe, however, some skepticism is the appropriate example of Merkel and Sarkozy reforms required. Whether, as the governments want to restrict new European rating agencies with political responsibility, the dominance of Anglo-American agencies, or - as Peter Bofinger and Sahra Wagenknecht in the camp of Keynesians and the welfare state saver is required - a European public rating agency will be established so far is all rhetoric.
Already on 9 March Angela Merkel during a visit to Luxembourg the "primacy of politics over the financial markets" have claimed. Lucas Zeise, a columnist for the Financial Times Germany realized at that time completely justified, the implementation of such a declaration will mean a complete change in the nature of the European Union. You mean, if they are consistently followed, that no more apparent constraint determine the policy, but social, ethical, political values and thus in the end even the interest of the majority.
is to be expected with such a development is not. The attitude of the Federal Government against Greece showed clearly what is expected of her, "pure political interests within the meaning of the German capital and within the euro zone, pounding on his supremacy German state. Criticized the forces of the market if they are directed against their own positions, even endangering the crisis solution in the interest of the United Economic Area EU and its international reserve currency. Otherwise, so far every EU intervention mechanisms to protect the employees with the needs of the market has been justified.
on European financial centers is currently much and loudly about "protectionism" whined when the relatively benign regulatory intentions of the German government will be discussed. One example is the financial transaction tax. It is now seriously discussed without Attac, which has been calling for just this year and a day and sold as the big success in the fight against the financial capital, to be mentioned, even with one syllable.
protectionism and free trade capitalism, it is now evident again interests, not fundamental differences, but the result-and situation-related decisions.
Published in: Jungle World, 27 May 2010
http://jungle-world.com/artikel/2010/21/41011.html
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