G20 Wants to Curb Rating Agencies

March 12, 2012 by · Leave a Comment
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The G20 Finance Ministers meeting in Mexico City agreed that they want proposals to curb the influence of rating agencies.

The ministers put a deadline of November on the project to look for ways to reduce the influence rating agencies have on investment decisions. The task was assigned to the Financial Stability Board (FSB), the group that recommends changes to the global financial system.

Russian Finance Minister Anton Siluanov explained to Reuters, “It was suggested, that the objectivity of rating agencies should be definitely controlled.”

The G20 Ministers’ statement says, “We have tasked the FSB to coordinate, with the IMF and World Bank, a study to identify the extent to which the agreed regulatory reforms may have unintended consequences for EMDEs [emerging markets and developing economies].”

Guido Westerwelle, German Foreign Minister, also urged the creation of an independent European rating agency. Reuters quotes him as saying, “It is time for Europe to prove capable of facing up to the credit ratings agencies.”

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