EU Banks Move to End Cooperation with Agencies
Dissatisfaction with rating agency decision-making has led major European Union (EU) banks to intensify talks about reducing cooperation with Standard & Poor’s, Moody’s and Fitch.
Sky News reports that widespread frustration has caused executives “from about a dozen of the Continent’s biggest lenders” to discuss the issue informally during the Institute of International Finance in Copenhagen.
Nothing was agreed to, says Sky News. But they quote an unnamed source as claiming that, “things are certainly moving in that direction.”
They also quote a senior bank executive as saying, “The ratings agencies got it horribly wrong on the way up; there are lots of reasons to suppose they are getting it wrong on the way down.”
The rating agencies have been aggressive in downgrading both EU banks and their countries’ sovereign debt. And it is expected that Moody’s has planned yet another downgrade for Barclays, Lloyds Banking Group, and Royal Bank of Scotland.