I wonder, what it would take to have another ratings agency ? Is this simply a case of Market Incumbency ?
Essentially, the ratings agencies have done pretty well over the years on corporate and government bonds. There is a lot of quality historical data, and a relatively small number of institutions involved.
Their models broke down when it came to mortgages and how thousands (millions?) of loans hang together. But that doesn't mean their models of corporate/government debt don't still hold up.
I mean, we're all reading this as if the BBC is a "credit rating agency" of news, free from any vested interest or political bias, but of course that's not true: the BBC has a history of attacking financial institutions. It didn't create the problems in Northern Rock's business of course, but it is largely responsible for there being a run on that bank and it collapsing (the depositors were never actually in any risk due to government guarantees to all savers).
If this is not reported in the rating then the Agency has no credibility.
It was the concern you described that led them to do nothing from 2004-2007.
To me this looks to be part of political pressure applied by Washington on the IMF, Greece and the Eurozone. I'm sure the politicians want to act but any measure is going to be unpopular with one electorate or another. It's a political play for the consumption of the European electorate.
Not that it's terrible relevant, but he told me TU has data on people going back to the 1920s.
edit: didn't read the article, but the same concept holds true for business CRAs.
The hard part is getting recognized, especially by govts. There's a problem in there somewhere....
> Is this simply a case of Market Incumbency ?
In much of the world, anyone can publish an opinion on any bond and lots of folks do, even if few of them call themselves "rating agencies".