Find Us


Are credit rating agencies too powerful?

Are credit rating agencies too powerful?
By Euronews
Share this articleComments
Share this articleClose Button

Credit rating agencies too powerful?

Victor, from Fontainebleau, France: “How did credit rating agencies manage to acquire such power over the European Union economy?”

André Sapir, Professor of Economics at the Free University of Brussels: “The simple answer to that question is that gradually, where governments displayed weaknesses in the euro zone crisis, the credit rating agencies took a bigger and bigger role. That might seem paradoxical because at the start of the crisis the agencies were criticised a lot, and rightly so, to some extent.

“We saw before the crisis that the credit rating agencies did not see it coming, and so it was said, ‘well, the agencies are, after all, either incompetent or they are profiting from different interests, and so they didn’t reveal the entirety of the difficulty’.

“Now that we are really in the crisis, the credit rating agencies almost every week are announcing bad news. I think that part of this bad news which is stacking up comes out of the fact that the governments are having big difficulties resolving the crisis.

“Therefore, I think that the credit rating agencies in fact are somewhat reacting to the governments’ lack of capacity to act decisively to resolve the crisis. And I think that, unfortunately, for as long as we are in this situation — and I hope it will not last, because I think we are really getting to the limit of possibilities — as long as this situation with the governments continues, I think we’ll see a very, very big role for the credit rating agencies.”

Share this articleComments

You might also like

What has changed after Germanwings tragedy?

Know your rights when your company sends you to work in the EU

MOOC, COOC and SPOC - Different online courses, different needs