Parliament Continues to Question Rating Agency Executives

May 4, 2012 by · Leave a Comment
Filed under: International 

The Treasury Committee of British Parliament conducted its third inquiry session with executives from the rating agencies, Fitch, Moody’s, and Standard & Poor’s.

The Financial News reports that the committee chair, Andres Tyrie, began questioning by asking Moritz Kramer, managing director and head of the sovereign ratings group at Standard and Poor’s for Europe, the Middle East, and Africa, if Standard & Poor’s had made a $2 trillion miscalculation in their rationale for downgrading the U.S. sovereign debt.

Mr. Kramer denied there was a mistake. Rather, he blamed the discrepancy on two models used to measure U.S. deficits in upcoming years. Mr. Tyrie’s follow-up question cited Finland’s AAA rating and asked whether the U.S. had less ability and willingness to pay its debt than this small sub-arctic nation.

Mr. Kramer essentially said that yes, he believed Finland to be a better risk than the U.S. and justified his opinion on the political turmoil in Washington.

The Financial News said that hostile questions and terse answers continued throughout the session.

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