YEREVAN, July 13, /ARKA/. European Central Bank President Jean-Claude Trichet said today the world needs more than three major credit ratings agencies because their actions exacerbate market swings.
According to the French daily Liberation, Trichet said the three major credit ratings agencies- Fitch, Standard & Poor`s and Moody’s, in general tend to amplify rises and falls in financial markets. “You can see it still today very visibly. That goes against financial stability,” he said in an interview with the French daily.
It is probably appropriate not to continue to have a worldwide oligopoly of three agencies. But the underlying issue is to attenuate or cancel out this amplification to which the rating agencies contribute,” he said.
Earlier the three major agencies were criticized harshly by the International Monetary Fund (IMF), the Elysee palace and the European Commission. Particularly, their decisions to downgrade the sovereignty ratings of Greece, then Portugal and Spain affected trading at European stock markets.
Earlier French economy minister Christine Lagarde said the practice of international credit ratings agencies to downgrade or raise the sovereign ratings of some countries 15 minutes before the closure of trades in Europe help stock exchange players to get richer. In May she called for a tighter control of the agencies. -0-
