Daily Archives: November 11, 2011

Michel Barnier

EU commissioner Michel Barnier

On what has been a bleak day for credit rating agencies after S&P’s faux French downgrade, here is a tiny bit of good news for the industry.

Michel Barnier, the commissioner overseeing European financial regulation, is on Tuesday unveiling plans to overhaul credit rating agencies, which take an unforgiving approach to many current industry practices.

While the main principles of the draft proposals will remain – powers to suspend ratings on stricken sovereigns, mandatory rotation of rating agencies, an approval process for their analysis methods – there are likely to be some last minute tweaks. Read more

Euro drachma

Josh Chaffin’s piece from the FT’s analysis page: Christos Chanos sits in a conference room at his family’s sun umbrella business in Athens and ponders one of the most pressing questions confronting his crisis-hit nation: should Greece leave the euro?

The head of a company founded by his grandfather in the ancient market stalls of the Monastiraki neighbourhood, he has first-hand experience weathering the destabilising effects of a debt crisis that has held Greece in its grip for nearly two years.

He understands the argument that reintroducing the drachma – which Greece swapped for the euro in 2001 – would enable the country to lower its costs and regain competitiveness. But, like many others, he is reluctant to go down that road. “If you ask me if we never should have entered, I could have a long discussion,” says Mr Chanos. “But at this point, I think it would be a huge distraction. What would happen the day after?”

 Read more