Ratings agencies under scrutiny as penalties for mistakes mulled

EUROPEAN Union (EU) finance ministers will discuss this week how they might penalise rating agencies that pass inappropriately harsh judgment on countries, a senior EU politician said yesterday.

Building on remarks that he wants a new EU markets watchdog to be able to fine rating agencies, Didier Reynders, the finance minister of acting EU president Belgium, said: “It must be possible to penalise. If after some weeks or months it is possible to say it (a downgrade) was a wrong signal, what is the responsibility of the rating agency?

“It is quite difficult to say that there is no responsibility if it is possible to prove it was a wrong analysis, a wrong signal.”