EU now wants to ban ratings agencies from warning that countries may be in financial trouble
EU now wants to ban ratings agencies from warning that countries ma...
techdirt.com
Ratings agencies, who rate the risk and financial viability of all sorts of debt products, were one of the major scapegoats of the financial crisis. A lot of people pointed the blame finger at them, noting that they rated all sorts of incredibly risky and often highly questionable financial instruments as being incredibly safe. And, it's absolutely true that they did a dreadful job. But, it's kind of ridiculous to blame companies for stating an opinion. On top of that, it's a basic free speech issue. You can't tell a company that it can't express an opinion on the financial soundness of something. To me, the real problem with the ratings agencies was that the government built them into the law. That is, the government required certain institutions to maintain specific percentages of "highly rated" bonds in order to engage in certain activities. That not only legitimatized the opinions of ratings agencies like Moody's and S&P, but it also gave those "opinions" much more of a feeling of fact, rather than opinion. Could you imagine if the government said movies could only be shown in theaters if the NYTimes and the Washington Post movie reviewers gave them positive reviews? That's what the law is basically like with ratings agencies.
And while I think that the big ratings agencies can make big mistakes, that doesn't mean the answer is to shut them up. However, some regulators in Europe disagree. They're discussing a plan to require agencies to not give out ratings, specifically on sovereign debt, which is where many of the key concerns are right now. With many countries in Europe facing serious debt problems (Greece, Portugal, possibly Spain and Italy among them), it seems like Europe has decided the best way to deal with the problem... is to stop people from talking about the problem.
It's difficult to think of a worse plan.
The defenders of the plan complain that S&P, Moody's and Fitch represent an oligopoly over ratings. And that may be true, but that's no excuse for stifling speech. The way to deal with an oligopoly is to add more competition to the market, rather than limiting what those companies can do... especially when it comes to things like expressing an opinion.
techdirt.com
Ratings agencies, who rate the risk and financial viability of all sorts of debt products, were one of the major scapegoats of the financial crisis. A lot of people pointed the blame finger at them, noting that they rated all sorts of incredibly risky and often highly questionable financial instruments as being incredibly safe. And, it's absolutely true that they did a dreadful job. But, it's kind of ridiculous to blame companies for stating an opinion. On top of that, it's a basic free speech issue. You can't tell a company that it can't express an opinion on the financial soundness of something. To me, the real problem with the ratings agencies was that the government built them into the law. That is, the government required certain institutions to maintain specific percentages of "highly rated" bonds in order to engage in certain activities. That not only legitimatized the opinions of ratings agencies like Moody's and S&P, but it also gave those "opinions" much more of a feeling of fact, rather than opinion. Could you imagine if the government said movies could only be shown in theaters if the NYTimes and the Washington Post movie reviewers gave them positive reviews? That's what the law is basically like with ratings agencies.
And while I think that the big ratings agencies can make big mistakes, that doesn't mean the answer is to shut them up. However, some regulators in Europe disagree. They're discussing a plan to require agencies to not give out ratings, specifically on sovereign debt, which is where many of the key concerns are right now. With many countries in Europe facing serious debt problems (Greece, Portugal, possibly Spain and Italy among them), it seems like Europe has decided the best way to deal with the problem... is to stop people from talking about the problem.
It's difficult to think of a worse plan.
The defenders of the plan complain that S&P, Moody's and Fitch represent an oligopoly over ratings. And that may be true, but that's no excuse for stifling speech. The way to deal with an oligopoly is to add more competition to the market, rather than limiting what those companies can do... especially when it comes to things like expressing an opinion.
"Destroying the New World Order"
THANK YOU FOR SUPPORTING THE SITE!
Latest Activity
- Top News
- Everything
Regrets That Cling to Me
Talking with my shadow in the nightI know it sounds contriteA vacuum without the lightThe silence…See More
Reality Is now Becoming Unhinged
Let’s take a trip down the modern-day rabbit hole we call everyday news and events, but on a more…See More
Ghislaine Maxwell & The Secret "Shadow" 9/11 Commission? | John Kiriakou
"You tuber Sabby Sabs sums up and joins dots. Don't miss this one."
"The Warriors is one of my favorite movies. I couldn't help but laugh at this spoof."
"cheeki kea, You might want to see predictions made by Robert Welch in 1957 and 1974 stating that…"
"cheeki kea, good points. We have a world full of twisted allied agendas that seem contradictory,…"
Ghislaine Maxwell & The Secret "Shadow" 9/11 Commission? | John Kiriakou
In this gripping excerpt from the Julien Dorey podcast, former CIA officer and whistleblower John Kiriakou reacts to a leaked email from 2003. The document r...
"Greetings to you Holyroller very awesome you've joined up with us all. I know you'll find…"
"Yes it's a sad and sorry situation we see evolving here. On one front and it's a large…"
When the Communists Take Over America!...Famous 1957 Anti-Communist Movie
"I remember this when I was a little seeing it on TV years after it was filmed and it scared me even…"
When the Communists Take Over America!...Famous 1957 Anti-Communist Movie
Starring Jack Webb and Robert Conrad, this 1957 movie by the United States Armed Forces Information Agency is perhaps the best known anti-communist movie eve...
Are the End Times Drawing Near?
Are we seeing the gradual fulfillment of the Battle of Armageddon? Think of it. The US and Israel…See More
Catherine Fitts: Epstein, CIA Black Budget, the Control Grid, and the Banks’ Role in War
Programmable digital currency is the final piece of the global control grid that’s finally snapping into place. Catherine Austin Fitts on how to defeat it. C...
© 2026 Created by truth.
Powered by
