European Banks Preparing To Boycott Big Three Rating Agencies

Tyler Durden's picture

We were wondering how long Europe's insolvent, and very much scorned, banks would take the constant downgrade abuse (or reacquaintance with reality as we like to call it, but that is irrelevant) by the rating agencies without retorting. After all the same organizations that allowed bank "credit analysts" to pretend they did work for years, when they all merely fell in place in some lemming-like procession, patting each other on the back, pocketing record bonus after record bonus and praising groupthink encapsulated by the made up letters AAA, are now largely non-grata first in Europe, and soon, following the imminent downgrade of American banks, in the US as well. It appears that the response is finally coming. Sky News reports that "some of Europe's largest banks are intensifying discussions about a move to reduce their co-operation with the big three credit ratings agencies amid widespread dissatisfaction with their decision-making." After all, when all they do is downgrade, as opposed to the old standby, upgrade, who needs them. In fact, why not just shut their mouths entirely. Sadly, this is precisely what is on the horizon.

From Sky News:

I have learned that finance directors and other executives from about a dozen of the Continent's biggest lenders held talks on the issue during the Institute of International Finance in Copenhagen last week.


I'm told that the discussions did not result in a formal decision to reduce the amount of information disclosed to Fitch, Moody's and Standard & Poor's, but one source familiar with the talks said today that "things are certainly moving in that direction".


The judgements of the dominant trio of ratings agencies have been questioned repeatedly as the Eurozone crisis has deepened, triggering downgrades of numerous European governments and major banks.


Moody's is expected to announce downgrades to the ratings of British banks including Barclays, Lloyds Banking Group and Royal Bank of Scotland in the next few days.


One senior bank executive put it like this to me: "The ratings agencies got it horribly wrong on the way up; there are lots of reasons to suppose they are getting it wrong on the way down."

They sure do: somehow they still rates banks in Europe higher than a D, when even blind chimps with typewriters would have no problem finding the correct key on the keyboard to describe the true solvency state of the continent's banking system.

In the meantime, the boycott of anyone who dares to write adversely of banks is coming. Because you see thair "assumptions" are wrong.

In an ideal world only banks, and specifically the same analysts who previously had relied solely on the rating agencies to do their work for them, should rate other banks. And the range of recommendations should range from Buy to Very Strong Buy only.

Anything below that should be forbidden by the respective constitution, of the US, and of the soon to be Federal German States of Europe next.

All of the above notwithstanding, the only real rating agency out there with some integrity was, is and will continue to be Egan-Jones. All else are merely fluffers for the largest paying client.

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disabledvet's picture

But they rated all that MBS as triple A, what's the problem?

CPL's picture

It's Wednesday?


So far that seems to be the only explanation.

ZerOhead's picture

Only a terrorist would do something as heinous as downgrade.

And you know what we do to terrorists...

Michael's picture

That's OK, Zero Hedge and the internet blogs will rate the zombie banks with greatest accuracy anyway just like a free market should operate.

NotApplicable's picture

Reggie better watch his back!

HoofHearted's picture

Reggie is meaningless. Sean Egan better watch his back. And we'll be watching it too. Egan-Jones is the only rating agency with any credibility. And that's why the SEC is after them...

Troll Magnet's picture

Only a terrorist would do something as heinous as downgrade.

And you know what we do to terrorists... them through back channels?

AlaricBalth's picture

Freud would say that the leaders of Europe are attempting to overcome their feelings of powerlessness. Killing the messenger is a last, futile attempt at asserting their absolute power.

kito's picture

headline: eurpoean populace preparing to boycott banks.....

Pladizow's picture

"Money power denounces, as public enemies, all who question it's methods or throw light upon its crimes." - Jennings Bryan

riley martini's picture

 No honor among thives. The banks co-fraudsters rating agencies waited until even the dullest obsever could see anything above junk was just another fraud.

GeneMarchbanks's picture

'All else are merely fluffers for the largest paying client.'

Zandi is Most Valuable Fluffer for 2012.

timbo_em's picture

Since Lebanese girls became the new half-asians will BB+ become the new AAA?

asteroids's picture

The truth hurts eh?

GeneMarchbanks's picture

It sure does, especially when AAA rated poop in a box blows up in your face.

ZerOhead's picture

My blind chimp Bobo with hairy palms that Michael Jackson gave me just typed 'XXX'.

Mark123's picture

Well done Bobo! 


Give Bob a big bonus this year so he can buy a place in the Hamtpons.  He can hang out with the other wall street crooks and fling his shit around with the best of them.

john_connor's picture

They don't want a rating when it no longer suits them.  Can we go below zero credibility?

Spitzer's picture

why wouldnt they ?

Ratings agencies represent the print zone. Not the Eurozone. US downgrade not withstanding

NotApplicable's picture

They'll just solve it with more socialism, duh.

"The Ministry of Financial Truth," coming soon to a dictatorship near you.

Essential Nexus's picture

Could the big three ratings agencies countinue their downgrades for free as punishment for the boycott?

NotApplicable's picture

Without adequate info, they'd be exposing themselves to all those slander/libel/butthurt suits the kangaroo courtesans are so fond of.

Gene Parmesan's picture

Amazing. Can you imagine their reaction if the agencies had actually done their jobs?

ragequit's picture

whats the timeline for american banks copying them?

riley martini's picture

The American banksters own them.

NotApplicable's picture

Honestly, I don't think nationalist labels apply to them, as they're "bigger" than that.

earleflorida's picture

there is no time line, it's just an infinite elliptical loop that breaks periodically for loop-hole adjunct adjustment, making the revolve-lution obtuse to the human psyche --- the tried and true Serta lexicon for counting sheep while you sleep... ? 

FED  subliminal pillow talk for insomniacs. 

MaggieL's picture

I'd be more upset as a ratings agency if a boycott was announced by customers who actually had money. 

levelworm's picture

And Egan-Jones is "super-independent"? Come on, don't be so naive.

homersimpson's picture

No one's perfect.. but I'll take an Egan-Jones rating anyday over the big ugly 3.

riley martini's picture

 Maybe Eagan Jones isn't independent but they are about two years a head of the fascist controlled agencies.

Ted Baker's picture


CommunityStandard's picture

Excuse me sir, but your caps lock appears to be stuck.

Mark123's picture

best response today!!  Still wiping the coffee from my keyboard....



akak's picture

Obviously, the poster in question is an advocate of the Inverse Rooseveltian Motto: "Speak Loudly and Carry a Small Stick".

NotApplicable's picture

You know, now that Fiddy and Oprah have made up, all is right with the world.

debtor of last resort's picture

No sir, you don't have cancer. Here, have an aspirine.

Dead Canary's picture

The new ratings:








Pancho Villa's picture

The truth hurts!

Not that the ratings agencies are actually telling the truth yet. Their rating are far too optimistic. But a tiny amount of truth is starting to creep into some of the ratings.

If the ratings agencies were rating the health of Francisco Franco, they would probably rate his condition as 'serious'.

lolmao500's picture

Why don't do they do like America and coerce them into putting puppets in like the US did with S&P after they downgraded the US? Not to mention the SEC suing Egan Jones... Funny that it's the US using mafia tactics, not Europe...

11th_hour's picture

Because they do not like their dirty laundry being aired in public....the curtain of secrecy will be closed.  No more internal information being audited by the rating agencies. 

They feel like it's now time to follow good advice.  "Better to be thought a fool rather than open your mouth and be proven to be one". 

This is not a good sign. 

magpie's picture

Too bad. Would have been nice to see the ESM have AAA, for a week or so.

slewie the pi-rat's picture


if you enjoyed nigel, check this out >---> Saving the Euro axelM

doya think they go so fas as allowing traders to short the ratings companies' and the parent companies' stocks?  L0L!!!

moody's, wholly-owned by warrenB can be shorted thru it's appropriate current  berkshireH holding scheme and maybe shorting g/sachs just as a side dish too? 

this is war?  more jello!  togaParty tonight!  double-secret ratings for sale!  will trade for deviant sex!  and digital money!  bigger bathtubs!  clothing optional!  code 10!

Pairadimes's picture

Yep. This is one of the milestones on the way to fiscal stewardship hell. We are actually a little ahead of schedule.