Skip to comments.Exclusive: ECB mulls scrapping rating rules for government bonds: sources
Posted on 06/21/2012 10:13:06 AM PDT by mojito
The European Central Bank is discussing a medium-term plan to scrap rating rules on euro zone sovereign bonds and instead set their value when used as collateral in lending operations on its own internal assessment, central bank sources said.
With the ECB not yet ready to take over the technical but highly political responsibility for rating sovereigns, the bank's policymakers will also discuss more immediate ways to help Spain and its banks at their meeting on Thursday, such as further widening the types of collateral Spanish banks can use.
The discussion come as Spain braces for a downgrade from small rating firm DBRS, which without a change in ECB rules will trigger an extra 5 percent penalty on Spanish bonds when used to get ultra-cheap ECB funding.
ECB members have heavily criticized the actions of rating agencies during the euro zone crisis and have vowed to reduce reliance on their assessments.
(Excerpt) Read more at reuters.com ...
Good luck finding any buyers if this plan goes through
1. First, demonize the
2. When that's done, demonize the ratings agencies that give guidance to the
3. Works best with howling indignation and a dollop of populism.
Just read the kilogram section of the scale and tell yourself it’s pounds. Not much different than what the ECB wants to do.
This has to be a plan that has to do with some EURO institution buying & offering its own bonds internally.
Come on, they don’t honestly expect me to invest according to their ratings.
The ECB is going to assign debt ratings to its own collateral?
Can I assign myself an 850 FICO score while we’re at it?