Lords slam Barnier's rating agency plans
Thursday 21 July 2011 - by Nicola York
Senior legislators in the UK Parliament have dismissed the European Commission's proposals for reform of the credit rating agency market.
Rating agencies have caused anger from EU policymakers when they have downgraded sovereign debt ratings of Greece, Ireland and Portugal but the committee says these downgrades "merely reflect the seriousness of the problems".
Committee chairman Lord Harrison says: "The ratings agencies have attracted a huge amount of attention and criticism as they have downgraded the ratings of Greece, Ireland and Portugal over the past year.
"They failed to spot risks which had been building within these states long before the crisis hit. Although they were not alone in this failure it does not absolve them of responsibility.
"The criticism they have faced, however, has largely been unjustified. The rating agencies did not precipitate the crisis, nor do we believe it is possible to say with any certainty that they exacerbated it.
"Valid concerns over their role in the 2008 financial crisis should not be allowed to colour an objective assessment of their decisions relating to the creditworthiness of some member states' sovereign debt."
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