rating agencies

Claire Jones

ECB president Jean-Claude Trichet may be unwilling to cede to Angela Merkel’s calls to overrule ratings’ agencies judgement on a Greek default – selective or otherwise. However, Mr Trichet’s position on the big three’s dominance of the industry is in line with that of the eurozone’s political masters.

At both this month’s press conference and in an interview published Tuesday, Mr Trichet made it clear he agreed with German finance minister Wolfgang Schäuble’s point that the oligopolistic structure of the industry was far from ideal.

When asked whether he would favour the creation of a European rating agency – something which Ms Merkel has backed since before Lehman Brothers’ collapse – Mr Trichet was more oblique. Read more

S&P jumped first, but Fitch has jumped further: the ratings agency has just knocked three notches off its credit rating for Ireland, placing the outlook at stable. Fitch’s rating is down to BBB+ from A-. S&P cut its rating two notches from AA- to A on November 24. Fitch is now two notches below S&P.

Moody’s, which has threatened a multi-notch downgrade, is again the last mover. Its rating remains at AA. So – for now – the chance of an Irish default is roughly equal to that of Russia or Japan, depending which rating agency you follow. This is likely to be temporary: Moody’s will probably join Fitch in a three- or even four- notch downgrade within a couple of weeks.