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Eurozone finance ministers issue new warning against credit rating agencies

03-15-2011 08:04 BJT

BRUSSELS, March 14 (Xinhua) -- Finance ministers of the 17 European Union (EU) countries that use the euro launched a new attack on Monday against credit rating agencies, saying that more regulations are needed.

"There should be a better regulation for credit rating agencies because we think this is particularly urgent," Luxembourg Prime Minister Jean-Claude Juncker told reporters after chairing a monthly meeting of the eurozone finance ministers.

The role of credit rating agencies came under fresh attack in Europe after Moody's downgraded the Greek debt grade further below junk status one week ago, and warned the bailed-out eurozone country might have to restructure its massive debts.

It downgraded Spain's credit rating by one notch to Aa2 only three days later, citing problems in the country's banking sector and a gloomy outlook for economic growth.

Both moves added pressure on the markets and intensified fears over the strengthening of the sovereign debt crisis, which already engulfed Greece and Ireland, and is now threatening Portugal and Spain.

Following the downgrade, Greece's finance minister immediately called for "urgent" steps by the eurozone to regulate credit rating agencies.

"I believe this is a matter that must be urgently addressed," George Papaconstantinou said in a letter to senior European Commission, eurozone and European Central Bank officials.

Juncker said the recent tension on the sovereign debt market concerning eurozone countries had been a result of the decrease in the credit rating for Spain and Greece.

"Many of the ministers were surprised with the timetable for adjustments and the analysis made," he said.

The EU had introduced two rounds of legislation to tighten regulation of credit rating agencies in the 27-nation bloc after they failed to warn beforehand of the 2008 financial crisis.

In the sovereign debt crisis, the role of credit rating agencies again came under spotlight. They were accused of exaggerating the seriousness of eurozone countries' debt woes and flaming market fear.



Editor:Zhang Pengfei |Source: Xinhua

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