I am sure all of you read in the press about the “downgrading of the Credit Rating from AAA” for the UK by some of the rating agencies. I still haven’t figured out what this really means because the last time I investigated I found out that when the United States was downgraded their interest rates actually dropped (in other words it was a benefit to the USA).
However, what I wanted to discuss is the question…who are the people behind the rating agencies (Standard & Poor, Fitch, Moodys etc)? Are these the same guys who a few years ago gave positive gradings to the Greek Government or to the various firms which packaged up self-certificate loans? Are these the same guys who only a few years ago arranged ratings for Northern Rock or AIG or RBS? Well, we all know how good the rating analysis was but what we don’t know is whether the same guys are still doing the same job – I hope for all of us they are not, otherwise I would suggest that we ask XXX to deal with all this AAA.