Low ratings for agencies

In the course of the world economic crisis, the financial ratings agencies have forged a deplorable image for themselves. This is not without good reason: they are incompetent, they operate as an oligopoly and there is clear evidence of collusion.

Incompetent, because they conferred the highest ratings on some of the most fraudulent issues of packaged subprime mortgages, when their function ought to be precisely that of orienting the market on the quality and credibility of a financial institution or product. They did so claiming that they operate only with the data offered by their clients. This seems to be a sort of bad joke rather than an excuse, since their reason for existing is supposed to be that they possess the capacity to discern the quality of the information they gather.

They represent an oligopoly because the three major Anglo-Saxon ratings agencies ? Moody's, Fitch and S&P ? share almost the whole of the market between them, while the negotiated regulatory norms, such as the registration and transparency demanded by the EU, have not modified their power by even an inch, nor their capacity for abusive use of this power.

They represent collusion and conflict of interests because they have been charging their clients for taking "X-rays," while at the same time offering them consulting services. Yet these firms, immersed in such questionable and obscure practices, have gone far beyond these inherent vices. Some of them, such as Moody's, have been pivotal in the long-drawn-out crisis of sovereign debt in Europe, taking the role of an agent specializing in economic coups, with practices that are destabilizing the market.

This is not just a question of opportunism. Moody's reduced the Spanish rating a few hours before the latest European Union summit conference, prompting the president of the Eurogroup, Jean-Claude Juncker, to describe its timing as "most surprising." When the Spanish Treasury's bond issue obtained very positive results immediately afterward, the Spanish economy minister, Elena Salgado, pointed out that "the markets trust the Spanish government more than they do Moody's."

Yet there is more. In issuing its report, the agency did not even take the time to wait until that same afternoon for the release of the new data provided by the Bank of Spain on the solvency of Spanish banks. And what is even worse, it failed to justify, or even to offer any data at all, to explain any reason or scenario that would back up its claim that the restructuring of the Spanish banking system would cost 50 billion euros, and not 15 billion, the figure that the Bank of Spain's supervisor had arrived at. This is unfair play, because if no explanation is offered of the parameters on which such appreciations are based, it is impossible to dispute them.