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Credit Rating Agency Fitch Sacked By Portuguese Banco Espírito Santo

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http://www.guardian.co.uk/business/2010/nov/09/fitch-credit-rating-agency-portugal-bank

The credit-rating agency Fitch was fired by one of Portugal's biggest banks today in the latest assault on agencies during Europe's sovereign debt crisis.

Banco Espírito Santo (BES) was downgraded from A to BBB+ but insisted that the action by Fitch did "not reflect the financial soundness of the bank".

It was the second downgrade of BES since July, prompting the bank to argue that there was "no valid justification for a three-notches downgrade in less than four months". "Thus the board of directors decided to terminate the contract with Fitch Ratings as a result of these rating actions," the bank said.

The agency also cut the ratings of three other Portuguese banks amid continuing concerns about the risks they faced in funding themselves on the markets and their reliance on funds provided by the European Central Bank (ECB).

The concerns expressed by BES follow fierce criticism of agencies during the crisis over debt-laden countries in the eurozone. A downgrade raises borrowing costs.

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More fuel for the idea the rating agencies got paid simply for giving a good rating rather than being objective.

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Always loved the name of this outfit: Banco Espírito Santo e Comercial de Lisboa.

"Bank of the Holy Ghost and Commerce of Lisbon".

Unfortunately Espírito Santo is just the name of the founding family.

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More fuel for the idea the rating agencies got paid simply for giving a good rating rather than being objective.

Really? I'm shocked..

Actually, the shocking thing is more that anyone who works for the ratings agencies is still outside of prison, let alone still employed to provide ratings, and that people still attach any credence whatsoever to the ratings they put out.

Call me a raving marxist-libertarian if you will, but I would have thought that the idea of having some central planners dictate how much bonds are worth, or what risk premium is attached, when these bonds are more-or-less freely traded in a more-or-less open market, is completely stupid.

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http://www.guardian....y-portugal-bank

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More fuel for the idea the rating agencies got paid simply for giving a good rating rather than being objective.

More than a tantrum, these people are evil.

I bet they were the first to criticise the US credit rating agencies for being partial and causing the crisis.

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Call me a raving marxist-libertarian if you will, but I would have thought that the idea of having some central planners dictate how much bonds are worth, or what risk premium is attached, when these bonds are more-or-less freely traded in a more-or-less open market, is completely stupid.

Nobody has to take any notice of them, the investors and banks choose to do so and central banks rely on the agencies. (except for soverign debt which is rated internally and the banks housing portfolios)

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Nobody has to take any notice of them, the investors and banks choose to do so and central banks rely on the agencies. (except for soverign debt which is rated internally and the banks housing portfolios)

very good move by the bank, i'll guess others will follow.

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Can you ever trust a foreign bank with your savings? Margaret and David Haddon did - and lost £146,000 when Portugal's biggest bank went bust

20 May 2015

British expats have lost life savings of up to £217,000 following the collapse of Portugal’s biggest bank, Money Mail has learned. Scores of Britons who retired to Portugal are just discovering that they are unlikely ever to see money they had saved in Banco Espirito Santo (BES).

..All savers with cash in regular deposit savings accounts were covered for compensation through the European-wide scheme. Because of this, initially, the Haddons were unfazed. The bank manager reassured them that their cash was safe.

..says: ‘I strongly advise people to use the services of a translator or an independent lawyer who understands the law in their home country. ‘They can check any legal documents thoroughly. ‘Too many people are prepared to either sign a foreign contract they do not understand or, even worse, sign a version in their mother tongue without checking it was a correct translation of the original.’

http://www.dailymail.co.uk/money/saving/article-3088130/Can-trust-foreign-bank-savings-Margaret-David-Haddon-did-lost-146-000-Portugal-s-biggest-bank-went-bust.html

Surely they were enjoying more interest on the bonds, than normal savings accounts, with their now whine that they thought

their money was safe in normal savings accounts (where lot of protection up to something like £72K).

Wouldn't we all like a slutty 3% - 5%+ return on capital vs sub 1% in a regular savings account. Regardless, up to them to ensure correct account opened. One for the excuse givers anyway.

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Nobody has to take any notice of them, the investors and banks choose to do so and central banks rely on the agencies. (except for soverign debt which is rated internally and the banks housing portfolios)

but you have to take note of them , by law. Pension funds etc are not allowed to hold investments that are rated below certain thresholds. It's a complete scam and a tool for political policy and graft. It is thoroughly communist. You want the price of anything ? Let the market bid for it.

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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