http://www.euronews.com/
Arnaud from Brussels asks: "My question for European officials is: how
far are we going to let rating agencies dictate how European stock
markets are run, and are we ever going to react against this speculative
lobbying?"
Arnaud from Brussels asks: "My question for European
officials is: how far are we going to let rating agencies dictate how
European stock markets are run, and are we ever going to react against
this speculative lobbying?"
Thierry Philipponnat, Secretary
General of public interest association Finance Watch, responds: "That's a
good question. We can't let this diktak continue. There's a very simple
solution. It's to permit investors to follow the rating agencies'
opinions without being obliged to. We're in an absurd system today in
which, once an agency's opinion is given, the investor is obliged to
follow that opinion. Why? Because the ratings are in the financial
regulations. So we have to get rid of all reference to the ratings in
the rules so investors can follow the ratings if they want to. They are
free to - fine - but are not obliged to. That's really the key."
Sébastien,
from Brussels, asks: "My question is as follows: which of Europe's
directives concern how the rating agencies are financed?"
Philipponnat
responds: "The alternative to the borrower paying the agency would be
that the investor pays the agency. The potential conflict of interest
would not be the same but it could be just as real. The essential
question is to ensure that the whole system does not depend on a single
opinion. The key to not having a system that degenerates is that when an
agency issues an opinion it remains simply an opinion and not the truth
with a capital 'T'. That's why one of the European Commission's
proposals consists of establishing a European index of ratings, which
would be given a framework and organised by the European financial
market authorities. It's an excellent proposal, because index means
averaging what's given by several agencies, and we'd depend less and
less on the opinion of a single agency."
Michael from Brussels asks: "I'd like to know when we're going to set up a European rating agency for sovereign debt."
Philipponnat
responds: "Yes, let's increase competition, yes, let's create European
agencies - but that's not enough. Other measures must also be taken: a
European ratings index, removing ratings from all financial regulation
so that we find ourselves in a healthy situation in which, as I said
earlier about what seems important to me, we would have analyses coming
out, and not verdicts."
