The financial markets tremble when the rating agencies disclose their ratings about the credit worth of a country.
Government leaders lose their sleep over the rating of their country. But often the ratings of Moody’s, S & P’s and Fitch were incorrect. “It’s just like making a rough estimate, giving a credit rating to a country is nothing but a board game.” – Jerome Fons (Former Director of Moody’s).
The rating agencies, or credit assessors, are all over the news. Recently, there has been many downgrades of mainly European countries and companies. With as a consequence troubled financial markets and governments that are getting deeper in financial trouble. Reducing a country’s credit rating can have such major consequences that government leaders, if their credit rating is at stake, are begging on the phone with the credit rating agencies.
Who are these credit rating agencies actually? What do they base their credit ratings on? And are the numbers in the reports they assign to companies and countries correct?
For more insight into the power of credit rating agencies, VPRO backlight spoke with Jerome Fons, ex-director of Moody’s, David Levey, former head of the Moody’s European Country Awards, Timothy Sinclair, Professor of Political Economics at the University of Warwick, and Dirk Müller, former stockbroker at the Frankfurt Stock Exchange.
In addition, VPRO backlight looks with Portuguese mayor Carlos Carreiras at the consequences of Portugal’s depreciation and talks with Ron Grassi, a retired lawyer who has started a lawsuit against the rating agencies.
In VPRO backlight, the story of the rating agencies, their influence on the financial markets and their role in the world.
Originally broadcasted by VPRO in 2012.
© VPRO Backlight January 2012
On VPRO broadcast you will find nonfiction videos with English subtitles, French subtitles and Spanish subtitles, such as documentaries, short interviews and documentary series.
VPRO Documentary publishes one new subtitled documentary about current affairs, finance, sustainability, climate change or politics every week. We research subjects like politics, world economy, society and science with experts and try to grasp the essence of prominent trends and developments.
Subscribe to our channel for great, subtitled, recent documentaries.
Visit additional youtube channels bij VPRO broadcast:
VPRO Broadcast: https://www.youtube.com/VPRObroadcast
vpr Metropolis: https://www.youtube.com/user/VPROmetropolis
VPRO Documentary: https://www.youtube.com/VPROdocumentary
VPRO World Stories: https://www.youtube.com/VPROworldstories
VPRO Extra: https://www.youtube.com/channel/UCTLrhK07g6LP-JtT0VVE56A
VPRO VG (world music): https://www.youtube.com/vrijegeluiden
VPRO 3voor12 (alternative music): https://www.youtube.com/3voor12
VPRO 3voor12 extra (music stories): https://www.youtube.com/channel/UCtgVYRLGraeL9rGMiM3rBHA
Director: Martijn Kieft
Research: Maren Merckx
Production: Marie Schutgens
Editors: Henneke Hagen, Jos de Putter
English, French and Spanish subtitles: Ericsson.
French and Spanish subtitles are co-funded by European Union.