EU calls for new bond rating system, after negative bond rating reviews

Credit rating agencies, the fox guarding the hen house -- conflict-of-interest to list a table of how a specifc bond stinks, not done -- listing aaa plus minus, does not say what defects specific debt holder agreements have, as each bond agreement is different -- new language needed for bond rating services
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[Credit rating agencies offer opinions; never to be taken as Gospel; multi opinions and access to these various, contradictory opinions necessary, so yes have right to regulate credit rating agencies. Modern markets can improve credit monitoring, changing the display, and allowing smaller investors to tell the story. ]

[ Credit rating agencies truth: communicating deficiency, and debt holders rights is the goal of bond rating agencies. Too long debt holders rights have been minimized, right to display what rights debt holders have is the foundation of a bond rating. Need for these basics. bond rating services need to display bondholder rights deficiencies. Better handling of bond chapter 11 filings, and improving communication of the specific irregulaties in covenants between debt holders and borrowers. and advocating bondholder rights. Aka it is not to attach a aaa rating or a failing grade, more than this. Bond rating service purpose in part is to label deficiencies for investors to see pitfalls.]

[Yes the EU has a right to access M4 and describe their bond rating system to detail the bonuses of doing so. Support more new watchdogs and alternative communication display alternatives, to monitor credit rating agencies.]




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Quote, "Mr. Barroso's commission is also planning to establish a new watchdog to monitor credit rating agencies, with the power to investigate, fine or de-license those that don't measure up, and is considering creating a European rating agency of its own. "

http://www.nationalpost.com/todays-paper/responsible+banks/3115317/story.html


http://in.reuters.com/article/idINIndia-49002320100602

Qutoe, "Credit rating agencies have been criticised for downgrading countries as the euro zone scrambled to mount a $1 trillion rescue package to restore confidence."

"Barnier said rating agencies would soon be put under the watch of a new pan-European supervisor with power to withdraw their licenses to do business if they break EU rules.

"Rating agencies will be asked in December to provide more information about how they decide the creditworthiness of countries or companies. Although they will not have to justify decisions, they must outline how they make them."

"Some European officials, frustrated with downgrades of states as the euro zone struggled to win back investors' confidence, hope this will tighten control of Moody's, Standard and Poor's and Fitch."