ECB chief Mario Draghi has taken a swipe at credit rating agencies after Standard & Poor’s downgraded the eurozone’s EFSF bailout fund. The move was expected after S&P cut the rate of nine eurozone countries last week. But Draghi suggested the agencies have too much influence.
“As regulators we should learn to do without ratings. Or at least we should learn to assess creditworthiness in a way in which ratings or credit rating agencies are one of the many components of our information,” said Mario Draghi.
It is another headache for eurozone leaders as they strive to complete a deal wide ranging reforms to resolve currency’s bloc’s debt problems. Draghi is urging them to see the task through.
“It’s vital that the commitments made by the heads of state or government are implemented promptly and fully, particularly but not exclusively in relation to the EFSF and the ESM,” added the ECB president.
The downgrade effectively reduces the EFSF’s lending capacity as a consequence of France and Austria losing their triple A status, and therefore some of their weight as guarantors of the fund.