Sanctimonious Governments
Published in die Tageszeitung
(Germany) on 17 January 2012
by Felix Lee (link to original)
(Germany) on 17 January 2012
by Felix Lee (link to original)
Translated from
by Ron Argentati.
Edited by Mark DeLucas.
Ratings Agency Power and Governmental Hypocrisy
Once again, one of the three U.S. ratings agencies has jumped into the battle to tame the Euro crisis. After downgrading the credit ratings of nine of 17 Eurozone nations — among them France and Austria — the most aggressive of the ratings agencies, Standard & Poor's, next took aim at the European Financial Stability Facility.
For the first time, the German government feels directly threatened by S & P. Chancellor Merkel ranted about the fact that it might be time to rethink Germany's dealings with the ratings agencies. What sanctimonious drivel. The fact that S & P is even in a position to drive the entire Eurozone to rack and ruin is the fault of the Eurozone governments themselves.
In the wake of liberalization of the financial markets over the past 20 years, the governmental regulatory agencies were fully aware that customers were increasingly being offered outlandish investment opportunities. Instead of doing their jobs and examining these runaway offerings and regulating them accordingly, they abandoned this duty and left it to the ratings agencies.
Even in the wake of the Lehman Brothers bankruptcy in 2008, they didn't think governmental intervention was necessary. Instead, they transferred that responsibility to the privately owned entities Fitch, Moody's and S & P, and even granted them expanded powers.
That raises the question of why Merkel, Sarkozy and even Obama continue to allow these ratings giants to continue with their harmful practices. The suspicion arises that they're more concerned with how the ratings agencies judge them than they are with the opinions of their own citizens. The ratings agencies are destroying democracy.
Once again, one of the three U.S. ratings agencies has jumped into the battle to tame the Euro crisis. After downgrading the credit ratings of nine of 17 Eurozone nations — among them France and Austria — the most aggressive of the ratings agencies, Standard & Poor's, next took aim at the European Financial Stability Facility.
For the first time, the German government feels directly threatened by S & P. Chancellor Merkel ranted about the fact that it might be time to rethink Germany's dealings with the ratings agencies. What sanctimonious drivel. The fact that S & P is even in a position to drive the entire Eurozone to rack and ruin is the fault of the Eurozone governments themselves.
In the wake of liberalization of the financial markets over the past 20 years, the governmental regulatory agencies were fully aware that customers were increasingly being offered outlandish investment opportunities. Instead of doing their jobs and examining these runaway offerings and regulating them accordingly, they abandoned this duty and left it to the ratings agencies.
Even in the wake of the Lehman Brothers bankruptcy in 2008, they didn't think governmental intervention was necessary. Instead, they transferred that responsibility to the privately owned entities Fitch, Moody's and S & P, and even granted them expanded powers.
That raises the question of why Merkel, Sarkozy and even Obama continue to allow these ratings giants to continue with their harmful practices. The suspicion arises that they're more concerned with how the ratings agencies judge them than they are with the opinions of their own citizens. The ratings agencies are destroying democracy.