Standard & Poor’s hit back at criticism over the credit rating agencies’ role in the euro zone debt crisis on Thursday, with its German operations head saying rating agencies would lose credibility if they “kept silent”.
“We risk our credibility if in certain times we hold back with ratings,” Torsten Hinrichs, S&P’s head of Germany, told the online version of VDI news, a weekly paper of the association of engineers.
“If the rating agencies kept silent, if transparency lacked regarding future solvency, markets would be even more unsettled than when we do comment,” he added.
European politicians have accused credit rating agencies of anti-European bias and called their downgrades a self-fulfilling prophecy, making it harder for countries under assistance programs to return to capital markets.
German Finance Minister Wolfgang Schaeuble said last week he believed limits should be put on the agencies’ “oligopoly”.
They have also presented a major hurdle in efforts to get private creditors to share the burden of a fresh Greek bailout, as they say they would likely treat any “voluntary” rollover of Greek bonds as a distressed debt exchange and declare it, at least temporarily, to be a selective default.
Asked about proposals to roll over bonds into longer maturities, Hinrichs said: “According to our ratings criteria this kind of restructuring would be a clear default. We are obliged to point that
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