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Some level of the financial crisis can be laid into the Basel agreements that wrote ratings agencies into the process - i.e. AAA is safe for pension funds, etc.

This ECB rule is the same mistake writ large. I understand the urge to invoke an outside agency on country ratings - it helps pretend things are "not political" - but the reality is that the ratings agencies are dominated by an ideology that is in fact very political.

Alas, the Brussels-Frankfurt Consensus is just another genetic mutation of the Washington Consensus, so the ECB is quite comfortable with the political ideology of the ratings agencies...

by Metatone (metatone [a|t] gmail (dot) com) on Thu Mar 25th, 2010 at 06:53:45 AM EST

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