From mid-April, rating agencies will no longer be able to rate Russia’s creditworthiness.
(Photo: dpa)
Bond ratings matter a lot. They decide which investors can buy the securities in question, because many of them are bound by internal rules or customer agreements to the judgments of the agencies, above all S&P, Moody’s and Fitch.
Even the central banks follow suit in certain cases. The ratings have a quasi-official character, even though they are carried out by private companies.
Nevertheless, the assessments are initially nothing more than private expressions of opinion. It is therefore problematic to ban them, as the European Union (EU) is now doing for Russian paper. Opinions are free to express in democratic countries, that’s an ironclad principle.
One might argue that the matter is of limited practical importance because the agencies are currently finding it difficult to give a positive verdict anyway because of the sanctions against Russia. But that makes matters worse: if you are going to limit a fundamental right, then there should be a compelling reason for it.
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The question of what freedom of expression means is anything but trivial. Where exactly is the line to abusive criticism? Where do bizarre opinions become “alternative facts”, a friendly euphemism for lies? The dispute over Wikileaks – who is allowed to publish what – also belongs in this context.
Certain standards must be met
The credit watchdogs themselves have at times overused the argument that ratings are mere expressions of opinion. After the financial crisis from 2008, they came under heavy criticism because they too often certified high-risk securities as being very safe. This has contributed to enormous economic damage and prompted justified calls for better oversight.
Anyone who acts as a rating agency promises the public that they will comply with certain standards. Ratings are therefore not “just” opinions – the public must be able to trust that they are well-founded.
Invoking freedom of expression is a poor argument when trying to fend off higher regulatory demands. The same applies to claims for damages that can be justified by an obvious lack of care. But a total ban on certain ratings crosses a line that should be untouchable.
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