Ratings from major credit agencies are not the only factors that influence asset prices, but negative scores have been the downfall of many countries. Curiously, the agencies are not always unbiased even though that is their aim.
In a daring move the European Securities and Markets Authority (ESMA) has challenged the ratings agencies. ESMA assures that Fitch, Moody's and Standard & Poor's have made accounting mistakes when the three firms all rated subprime mortgages incorrectly and manipulated data in order to encourage investors to switch from European assets to assets in the United States, where ratings are still relatively high.
Does the mistake have anything to do with the fact that the firms are based in the US? Comparing the data to a ratings agency in the Europe would offer a counterpoint, but like many things on the Old Continent, these agencies are moving so slowly that we cannot know at this point.
