EU plans new financial regulator for rating agencies

Source: BBC

Plans for an EU-wide financial markets watchdog have been put forward by the European Commission. The proposed "European Security Markets Authority" would initially regulate credit rating agencies, but could be given broader powers at a later date.

The rating agencies have been accused on both sides of the Atlantic of being a major culprit in the financial crisis. The agencies gave their highest "AAA" rating to billions of dollars of debts that went bad in the financial crisis. Mr Barnier criticised the rating agencies in May for their rapid downgrade of Greece's debts to "junk" status.

"I think we need to go further to look at the impact of the ratings on the financial system or economic system as a whole," he said at the time.

"The power of these agencies is quite considerable not only for companies but also for states."

Read more: http://news.bbc.co.uk/2/hi/business/10215957.stm

and it may not even take as long as appointing all its members.

These letter-grade ratings are a kindergarten con, anyway - they make recommendations without offering any guarantee, yet somehow their recommendations are treated as such.

What needs to happen is that people who make bad investments need to lose their money! And it needs to happen often enough and badly enough that when people invest in the future they do their due diligence and participate in the responsibilities of ownership.