ECB Nowotny Sees Problem of Rating Agencies’ Political Role

European Central Bank Governing Council member Ewald Nowotny said that Standard & Poor’s move to put 15 euro nations on review for possible downgrade shows the problem of rating companies’ increasingly political position. “This step highlights the problem that rating agencies increasingly are assuming a political role,” Nowotny, who also heads Austria’s central bank, said today in an interview in Vienna. “Nevertheless, the necessity remains that Austria pursues a policy of long-term budget consolidation.”

The rating company today put the countries on review, saying that “systemic stress in the euro zone has risen in recent weeks and reached such a level that a review of all euro zone sovereign ratings is warranted.” This includes Austria, which currently is rated AAA.

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