Do we depend too much upon credit rating agencies?
The ongoing argument between the Irish authorities and the S&P credit rating company threatens the medium to long-term position of credit rating companies around the world. The Irish authorities took the rather usual step of arguing about the basis upon which the Irish sovereign debt credit rating was reduced which appears to be a very different stance to that taken by the IMF and the European Union.
While many people would argue that the IMF and the European Union have a potential conflict of interest, as they will both be expected to back up failing economies with cold hard cash, this is not always the case. However, it has to be said that the likes of Moody's and S&P do have a significant impact upon not only the cost of future sovereign debt, and servicing existing debt, but also companies on stock markets around the world.
Even though every argument has two sides, with the credit rating agencies often taking a different view to the underlying companies or governments, we need to find some kind of mid-ground unless this uneasy relationship between governments, companies and the credit rating agencies could be in trouble.
Share this..
Related stories
Two thirds of Brits avoid talking about finances
29/06/2015 Two thirds of people in the UK try to avoid talking about their finances, according to research from the Debt Advisory Centre. A third of people in the UK don’t discuss with their friends or family how much they earn, and the same number would avoid discussions about debt. Even discussing the value of their home makes 14% of people awkward. Peoples reluctance to discuss fin...
Read MoreLoan Rates Rising
A report by the Moneyfacts website has found that 14 different lenders have actually increased the rates of interest on their loan packages over the last two months. Interestingly it seems as though Tesco and the AA have actually introduced tow rises during this period. So why are loan rates increasing as mortgage rates are falling?
There is a growing suspicion that many UK lender...
Consumer borrowing at highest level since 2005
01/05/2015 British people borrowed more money in March then they have done before the 2008 financial crisis, according to figures from the Bank of England (BoE). The biggest rise came from unsecured borrowing, such as overdrafts and bank loans, which accounted for £1.1 billion of the overall £1.24 billion rise. Credit card lending increased by £200 million. In contrast, mortgage app...
Read MoreWhat is your overdraft interest rate?
While the vast majority of people in the UK will have some form of overdraft facility how many are aware of the interest rate currently being charged on any outstanding balances? A report today confirms that the average rate charged by banks and building sites in the UK during the month of August was a phenomenal 19.1% which is the highest figure since records began in 1995. As more and more pe...
Read MoreCost of personal loans on the rise
Interest rates on personal loans are rising fast, thanks to five interest rate rises since last summer and the global credit crunch, according to Moneyfacts.However, with more people looking to borrow because of pressure from mounting living costs, consumers are being urged to shop around for the best possible rate."This week loan rates have taken a real battering, with a total of nine providers h...
Read More