Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-02-10-Speech-2-116"
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"en.20040210.5.2-116"2
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".
Recent financial scandals, such as Enron and Parmalat, are further evidence of the consequences of liberalising capital markets and the role of the rating agencies that gave the creditworthiness of these giant transnationals a clean bill of health, even though they did not disclose any information on their activities. This was only allowed to happen because the rating agencies are a product of the private sector, a self-regulating product of the market that creates mechanisms to assess the creditworthiness of entities that finance themselves by collecting money from third parties, such as companies that float on the stock market and even States, in terms of issuing public debt.
Rating agencies wield great power in the financial market, since rating is a legal condition of eligibility for investment portfolios. Additionally, the ratings ‘market’ is highly concentrated and the biggest agencies, two of which have their headquarters in the USA – one gave Parmalat a positive rating – operate an oligarchy.
As a self-regulating instrument of regulation, the rating agencies serve to extend the liberalisation of the capital markets. In order to make them an essential regulating body, they would have to be regulated by public bodies within the framework of national legislation and jurisprudence.
The report manages to ask questions and make diagnoses, but does not prescribe any medicine, which only serves to encourage these self-regulating instruments.
The question is more political than technical, and, politically speaking, the end-product justifies our vote against."@en1
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