Friday, July 08, 2011

EU Stifling of the Rating Agencies

I mentioned the EU attack on the ratings agencies in various postings yesterday. I am glad to be joined in issuing these warnings by Ambrose Evans-Pritchards whose columns I seem to have missed over recent months! Today his piece in the Daily Telegraph, linked here, titled "Europe, Free Speech, and the sinister repression of the Rating Agencies", begins as follows:

Before we all join the chorus of abuse against the robber agencies, let us not lose sight of what is happening in the eurozone. The EU authorities are attempting to muzzle free opinion, first by threatening Fitch, Moody’s, and S&P with vague retribution, and then by drafting restrictive laws to prevent them from publishing unwelcome messages.
It is financial repression, pure and simple. The same will be done to the press in due course. Then to you, dear reader.
“We must break the oligopoly of the rating agencies,” says German finance minister, Wolfgang Schäuble. By “we”, of course, he means the EU apparatus of coercion.
The European Commission has already created a pan-EU oversight body with binding powers to breathe down the necks of these agencies. It will draft restrictive legislation by the end of the year. The Portuguese downgrade ensures that it will be even nastier.” Developments since the sovereign-debt crisis show we need to take a further look at reinforcing our rules,” said Commission chief Jose Manuel Barroso.
Mr Barroso came close to accusing the agencies of cartel activities and a malicious agenda.



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