Process evaluation of banking under scrutiny

My friends, this was taken from O Público / The Public newspaper:

http://economia.publico.pt/Noticia/regulador-europeu-investiga-grandes-agencias-de-rating-1552911

Process evaluation of banking under scrutiny

European regulator investigates major rating agencies

The organization that regulates financial markets in Europe opened an investigation into the conduct of major credit rating agencies: Moody's, Standard and Poor's and Fitch.

The aim is to determine whether these entities in evaluating performance of the banks is more correct.

News of the inquiry launched by the European Markets and Securities Authority (ESMA) was released on Monday by London's Financial Times newspaper.

The newspaper quotes the president of the ESMA, Steven Maijoor, who declared that the purpose of this investigation is to determine whether the process evaluation of banking by these three agencies is sufficiently rigorous and transparent.

The rating agencies (rating the risk of extending credit to an entity) only began to be regulated in Europe in 2011 after the European Union have required to give an account to ESMA.

At the same time, criticism of the actions of those entities reached its peak, following widely disputed decisions.

First, agencies have been under fire before the start of the international crisis, have given positive reviews about products and banks that later proved to be in poor condition or even in bankruptcy.

Then there were strong suspicions regarding the decisions that led the agencies to downgrade the rating of banks in succession and states in the middle of the euro crisis.

"The bank ratings are very important, because they are an important part in assessing the State's own rating and the debt of these," says Steven Maijoor.

In June, says the Financial Times, Moody's lowered the rating of 15 giant banks, and Standard and Poor's had already done the same last year in November.

These decisions, says Maijoor, raise "concerns about whether there is enough analysis tools" within agencies.

The same controller ensures that the procedure of ESMA is not an attempt to change grades or to influence the agencies. "We're not to put any barrier to methods.

We ask only that the decisions they make sense and logic", says the leader of the ESMA, adding that many decisions must be grounded.

"It is important that each individual assessment deserves the same attention to detail and analysis," it refers.

That's interesting, Pedro, it's crossed my mind that these rating agencies are making things even worse, and causing panic.

Which then makes me wonder why they are doing that.

bb1, your words are mine, these rating agencies have no credibilty.

I don't actually know what has been going on here, and I can't be bothered to work it out. Suffice to know that there is yet more skullduggery going on. These people are the bloody pits. Nasty little smart arsed boys who make a mockery of hard working people.