Shooting the Messenger

by Andrew Stuttaford
The fact that the ratings agancies have the privileged position that they do has not proved to be a good thing, but this looks a lot like shooting the messenger:

BRUSSELS (Dow Jones)–The European Union’s top official questioned the objectivity of major credit rating agencies Wednesday just hours after Moody’s Investors Service downgraded Portugal, intensifying Europe’s debt crisis. “It’s quite strange that the market is dominated by only three players,” said Jose Manual Barroso, president of the European Commission, the EU executive branch. He was referring to Moody’s, Fitch Ratings and Standard & Poor’s Corp. “It shows that there might be bias in the market when it comes to evaluation” of Europe, Barroso said. His remarks at a news conference came in response to questions about Moody’s decision Tuesday night to downgrade Portuguese debt to junk status.

Oddly, there were no such complaints when the agencies were awarding the PIIGS ratings that implied that one currency really did fit all.