Ignore ratings agencies: ECB chief
(18 January 2012 – Europe) The importance of ratings agencies has been downplayed by European Central Bank (ECB) chief Mario Draghi, who said its time to live without them, or pay more limited attention to them.
His comments come after Standard & Poor’s mass downgrade of eurozone countries.
'I think what we should do is to learn to live either without them or with them but to a much more limited way than we do today,' said Draghi, speaking in his capacity as head of the European Systemic Risk Board (ESRB) to the European Parliament in Strasbourg.
'To a great extent, markets anticipated these ratings changes and priced their assets as if these ratings had already been issued,' said Draghi.
Europe's leading stock markets on Monday shrugged off a wave of ratings downgrades on Friday, including that of France's triple-A status, while the euro remained essentially unchanged.
Draghi said the euro zone crisis had got worse in recent months, characterising the situation as 'very grave'.
'We are in a very grave state of affairs and we must not shy away from this fact.'
Draghi also warned that European efforts to tighten the bloc's fiscal rules as a response to the crisis must be implemented quickly.
'The euro area heads of state and government have agreed on an important fiscal compact,' said Draghi.
'However, decisions without matching actions are not enough,' added the ECB president.
'I think what we should do is to learn to live either without them or with them but to a much more limited way than we do today,' said Draghi, speaking in his capacity as head of the European Systemic Risk Board (ESRB) to the European Parliament in Strasbourg.
'To a great extent, markets anticipated these ratings changes and priced their assets as if these ratings had already been issued,' said Draghi.
Europe's leading stock markets on Monday shrugged off a wave of ratings downgrades on Friday, including that of France's triple-A status, while the euro remained essentially unchanged.
Draghi said the euro zone crisis had got worse in recent months, characterising the situation as 'very grave'.
'We are in a very grave state of affairs and we must not shy away from this fact.'
Draghi also warned that European efforts to tighten the bloc's fiscal rules as a response to the crisis must be implemented quickly.
'The euro area heads of state and government have agreed on an important fiscal compact,' said Draghi.
'However, decisions without matching actions are not enough,' added the ECB president.
Subscribe