LONDON (MNI) - The large 'AAA' sovereign borrowers - like the US, UK, France and Germany - have 'exceptional financing flexibility', Fitch Ratings said today, but warned this is not enough to maintain their current rating.

The major AAA states must set out further credible consolidation plans in 2010 to secure their triple-A ratings, the ratings agency announced today in its 'Sovereign Review and Outlook' for 2010:

Is Fitch a single French company with offices in London and New York or are these independent companies? It would seem that there might be peril to a rating company with a history of recent questionable ratings, no downgrades prior to defaults, etc. if their actions appear poised to further damage the financial stability of the country in which the operate. One could imagine a new-found interest in their performance in 2008 in certain countries.

One could also imagine a phone call from someone at, say, Goldman Sachs to Fitch or S&P innocently inquiring as to what the appropriate fee might be to rate new bond issues from, say, the US Treasury. A downgrade of a major sovereign issue could introduce volatility that could require lots of additional re-ratings. How do we assess the issue of conflict of interest in such circumstances? Or does anyone bother?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."