Europe to regulate credit rating agencies
CREDIT rating agencies' regulation has been welcomed by Plaid's MEP Jill Evans.
The European Parliament has approved the legislation.
In future these bodies will only be able to issue sovereign debt ratings at specific times and they will be liable for damages in the event of "ill-founded ratings".
Unfavourable credit ratings have led to soaring public debt in many countries which has caused financial hardship for a great number of people.
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Speaking after voting in favour of the legislation, Ms Evans said:
"Decisions made by credit rating agencies can see the cost of a country's public debt soar overnight. The knock-on effects of this include cuts in public spending which leads to real financial hardship for many families.
"It's absolutely right that these agencies should be held to account for their decisions. If you buy a house on the basis of bad advice, you can quite rightly hold to account those who gave you the bad advice. The same should be a true for Credit Rating Agencies.
She added: "I regret that we were not able to move away from crude triple letter ratings to a more serious figure based system. But on the whole what has been approved should bring about greater stability in the system."
Comments
by Neathboy234
Friday, January 18 2013, 10:55AM
“Some more news today on our credit rating. Not such good news for holiday makers and inflation, but good for exporters
The UK pound has continued to weaken against the euro, falling below the 1.20 level for the first time since early April 2012.
Currency traders said that concerns over the UK's AAA credit rating and relationships with the European Union were undermining sterling's strength.
The pound was worth just over 1.19 euros in trading late on Thursday, making a euro worth about 83.5 pence.
That means UK tourists exchanging money are like to get fewer euros.
The pound has fallen 3% since 3 January, according to Bloomberg data, which Harry Adams, managing director at Argentex, said suggested that "2013 could be a disappointing year for sterling".
He said: "There are two main areas of concern for the pound: firstly, the loss of the UK's AAA credit rating which is becoming increasingly likely and secondly, Britain's unclear position in the EU.
"We only have to look back a few months to see that currencies react badly to uncertainty. The longer this debate drags on, the harder sterling will fall."”
by Neathboy234
Friday, January 18 2013, 10:28AM
“This is an excellent move, the only shame is that it was not in force before 2008. We all of course remember how some rating agencies gave various banks a AAA rating only just before they collapsed.”