Wednesday, May 5, 2010

French Minister: Public Ratings Agency Worth Considering

French Minister: Public Ratings Agency Worth Considering


PARIS (Dow Jones)--French finance minister Christine Lagarde late Monday said it is worth looking at the possibility of a public ratings agency.

Speaking at the national assembly, Lagarde said that ratings agencies have presented serious problems and questions have been raised on how to apply codes of conduct and increase control by market authorities.

Lagarde said other possibilities as well as a public agency should be considered, including indexes of analyst ratings published by central banks.

"The aggregation of analyst ratings could make an instrument that would perhaps be a bit more solid," Lagarde said.

French President Nicolas Sarkozy said Saturday that he and German Chancellor Angela Merkel are working toward new propositions on the regulation of ratings agencies.

Rating agencies have been in the cross hairs of governments after Standard & Poor's downgrade of Greece's debt to junk status last week, which was followed by a dramatic widening of spreads and an emergency meeting of euro-zone members and the International Monetary Fund over the weekend.

On Sunday, the euro-zone members and the IMF agreed on a EUR110 billion package for Greece, with EUR30 billion of the total coming from the IMF.

Lagarde was speaking at the presentation at the national assembly of a change in France's budget to allow it to release funds for its EUR16.8 billion share the euro zone and IMF's aid package for Greece.

Lagarde said the type of agreement that the European Commission, euro-zone states and the IMF carved out over the weekend may prove to be a sufficient mechanism in the future.

But she added that Germany's proposition of the creation of a European Monetary Fund merits discussion and shouldn't necessarily be ruled out.

-By William Horobin, Dow Jones Newswires; +33 1 4017 1737;

No comments:

Post a Comment