Don’t Put All Your Ratings in One Basket

Regulatory over-reliance on ratings isn’t just a U.S. problem. As we have seen here in the U.S.,  using ratings as the ultimate measure of value is dangerous.

Ratings are too blunt a tool to measure economic value. It makes the ratings agencies the default arbiter of capital levels. The stakes are too high to use a single statistic measure.

ECB Must End Moody’s Veto on Greek Debt, Goldman Says – Bloomberg, December 18, 2009