The exuberant regulation of the credit rating agencies is always sprouting new flowers. The instrumentalization of rating agencies for political goals is being discussed at the United Nations, although right now it is becoming clear what negative effects it has when rating agencies are used for political sanctions.
At the “High Level Meeting on the Role of Credit Rating Agencies in the implementation of the 2030 Agenda for Sustainable Development” high-ranking representatives of the United Nations Department of Economic and Social Affairs are discussing issues that are not relevant to current affairs. The meeting is about “old acquaintances”, criticism of the leading rating agencies. It’s about banalities like the fact that credit ratings play an important role in international capital markets as they provide creditors with assessments of a debtor’s relative risk of default. “Nonetheless,” writes the United Nations Department of Economic and Social Affairs, “inaccurate ratings can impact the cost of borrowing and the stability of the international financial system, as demonstrated during the 2008 global financial crisis. During the economic crisis that emerged as a result of the COVID-19 pandemic, attention has returned to the role of credit ratings on debt sustainability and stability.”
The leading international agencies have been aware of the issues raised by the debaters for many years. The problems have been addressed and systematically tackled for some time. As a consequence of the discussions, it can only be stated that the leading agencies may not have been sufficiently successful in documenting their work to date in a transparent manner and also in communicating it to the appropriate places.
In the middle of the war with Ukraine, much more urgent or questions are overlooked. Today experts from Switzerland have their say and hit the nail on the head. The main issues are as follows:
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