Meet The French Major Whose Spanish "A" Rating Keeps The ECB €17 Billion Margin Call Away

Tyler Durden's picture

Egan Jones may be a registered NRSRO, but that doesn't matter to the global status quo perpetuation syndicate ("SQPS" or "the syndicate"). Why? Because the small rating agency misplaced a comma when it was filing its NRSRO application with the SEC and has infuriated the same clueless and corrupt SEC, which 2 years after the flash crash still allows the high freqs to make a total mockery of the market (as seen here). Another reason: it recently downgraded Spain to a CC rating, the lowest and thus most accurate of all rating agencies, with a C rating projected, which means if its rating were to be taken into account by the ECB, the result would be massive margin calls amount to 10% or higher of all the Spanish bonds repoed at the ECB. Instead, the SQPS is delighted to have Canadian-based DBRS on its side. Why? Because the tiny firm's A-rating obviates all others' sub-A ratings, this includes Moodys, S&P and Fitch, at least in the eyes of the ECB and thus Mario Draghi has an alibi to not demand an additional €17 billion collateral call from Spain, which would send its banking system on full tilt (this is money neither Spain, nor its banks has to spare). Which is why we wish to present to our readers the man behind the Spanish A-rated myth: Fergus McCormick (Reed College; BA, with honors, French), formerly of Spanish bank BBVA (surely BBVA is not calling in any favors from its former employee currently head of sovereign ratings at DBRS; none at all).

Because if there is one person the SPQS, not to mention Spain's insolvent banks, should erect a monument to post-haste, it is Fergus, and his A (low) rating which is the only thing keeping the ECB from extracting its €17 billion pound of flesh from Spain (something the ECB most certainly does not want to do for numerous quite obvious just as insolvent reasons).

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