Bank capital zealots hang up their hairshirts

December 10, 2015

The Basel Committee that sets global bank rules has backed down in its attempt to stop lenders from using rating agencies to measure asset riskiness. A change to measuring real estate loans could yet hurt. But it adds to a sense that tough Basel IV rules could be a paper tiger.

Timing of S&P U.S. downgrade couldn’t be better

August 7, 2011

The Standard & Poor's downgrade of the United States couldn't have come at a much better time.

S&P warning won’t change euro zone equation

December 7, 2011

The risk of a mass ratings downgrade won’t be the main concern of euro leaders at this week’s summit. Bond yields were already signalling some distress, and the collective threat removes some of its sting. Governments’ main problem is convincing the ECB they’re serious at last.

Moody’s shows UK needs more austerity, not less

February 15, 2012

The rating agency may downgrade the UK because of much weaker growth prospects. The government’s critics will demand less austerity. But the UK is still spending 120 bln stg more than its tax take. Policy is right. A downgrade looks unjustified provided the UK keeps cutting.

Time for banks to gang up on rating agencies

May 28, 2012

If Moody’s downgrades several large investment banks, short-term funding may dry up and collateral demands increase. In spite of well-known flaws, ratings remain hard-wired into global finance. The latest review gives bankers the perfect excuse to curb agencies’ power.

Downgraded banks should rush to borrow

June 22, 2012

Most don’t need the cash. And despite the 15 Moody’s ratings cuts - by three notches at Credit Suisse and two at Morgan Stanley - short-term funding and collateral weaknesses should have already been fixed. But jumping back into markets quickly is the best way to show up Moody’s.

Moody’s downgrade is good news for France

November 20, 2012

The U.S. ratings agency has followed S&P in stripping France of its AAA status. The arguments are well known, and markets yawned. But the move will add to the pressure to plough ahead with reforms. It could even help François Hollande convince the French there’s no time to lose.

Why do markets pay attention to rating agencies?

April 28, 2010

Why do markets still pay attention to what rating agencies have to say?