By El
Periódico de Aragón
August 8, 2011
Contrary to what the literal translation of Standard & Poor
from English to Spanish may suggest, this company's business has
actually nothing to do with the poor. Its function, as well as that of
their counterparts Fitch and Moody's, is to qualify
governments
and businesses. Their marks are intended to help investors to make
their decisions. Thus, if a country or a bank has the triple A, which
is the highest rating, this is considered among the safest to invest
in.
The shareholders of these
agencies
One
of the top owners of Moody's is Berkshire Hathaway, an economic
conglomerate headed by billionaire Warren Buffet. Standard &
Poor's, meanwhile, is controlled by Mc Graw Hill, which has major
interests in publishing and in the media. Fitch, the smallest of the
three, is linked to the French group Fimalac. Europe wants to create an
European agency.
Countries with triple A
rating
There
are currently 15 countries with triple A, after the U.S. lost this
qualification by Standard & Poor's. The three agencies measure
their ratings in different ways but generally agree in their
qualifications. Now the qualified triple A are: Canada, Australia, New
Zealand, Singapore, Germany, Austria, Denmark, Finland, France,
Luxembourg, Netherlands, Norway, Sweden, Switzerland and the UK.
Africa's and Latin
America's poor ratings
No
country in Africa or Latin America has a triple A. If your country has
this rating it means that its ability to pay is very high. After the
triple A follows double A. It indicates a somewhat reduced ability to
pay. Triple B is still considered acceptable for investment. From
double B to D, it is seen as dangerous or leading to failed
investments.
Growing doubts about the
agencies
Since
the outbreak of the financial crisis there has been much talk about the
evaluation reliability of credit rating agencies, because of the
limited transparency of their methodology and problems related to
incentives. The agencies rated triple A the sub-prime mortgages that
infected the entire international financial system, as well as the
failed U.S. bank Lehman Brothers.
Al Gallo is the Editor of Translation Reference. Google: Google+
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