Ratings agencies questioned by former RBS boss
A change in the way that credit ratings agencies operate has been called for by former chairman and CEO of the Royal Bank of Scotland, Sir George Mathewson.
Business presenter Simon jack was told by Sir George Mathewson that ratings need to be "as accurate, fair and balanced as possible".
He added: "I don't understand why there is so much emphasis on protecting a status quo which has been clearly seen to have failed."
Fitch, Moody’s and Standard & Poors, the three big credit ratings agencies, have been accused of being both neglectful and also intruding too much in international politics.
For failing to address the topical crisis over US subprime mortgages and the downgrading of France and more significantly the US, the agencies have been extensively criticised.
Sir George continued to explain that forcing companies to use a wider range of credit agencies in rotation would instigate a “healthier industry and financial a sector with less risk”.
The Bertelsmann Foundation in Washington, as an alternative to agency rotation, is outlining plans for a not for profit credit rating agency.
Annette Heuser, executive director of The Bertelsmann Foundation told Simon Jack that their model “tries to make the imperfect world a little bit more perfect”.
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