[Greens-Media] Unreliable ratings agencies hold Roozendaal hostage

[John Kaye]

Unreliable ratings agencies hold Roozendaal hostage

Media Release: 14 October 2008

The reliability of the companies behind the state's AAA credit rating
has been called into question before a NSW Legislative Council budget
estimates committee today.

Standard and Poor's and Moody's have been heavily implicated in the
subprime mortgage crisis, according to Greens NSW MP John Kaye.

Dr Kaye said: "They rated many Collateralised Debt Obligations based on
highly unreliable mortgages as AAA. 

"NSW Treasurer Eric Roozendaal is relying on Standard and Poor's and
Moody's to justify a slash and burn mini-budget despite their
fingerprints being all over the current global financial meltdown.

"Treasurer Roozendaal laughed off concern about Standard and Poor's and
Moody's track record with Iceland and the CDOs.

"A fortnight ago Moody's rated Iceland Aa1.

"Since then the Icelandic financial system has collapsed and Britain
has been forced to step in to guarantee bank deposits.
 
"NSW pays Standard and Poor's and Moody's for the privilege of being
rated in what is effectively a ‘cash for comment' arrangement. 

"The one unpaid credit agency, Fitch, rates NSW as AA+, one down from
AAA.

"Cutting spending on services and infrastructure at a time when the
state is experiencing negative growth will undermine the Federal
Government's stimulus package.

"It is a recipe to throw the state into recession," Dr Kaye said.

For more information:	John Kaye 0407 195 455 

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John Kaye
Greens member of the NSW Parliament
phone: (02) 9230 2668
fax: (02) 9230 2586
mobile: 0407 195 455
email: john.kaye at parliament.nsw.gov.au
web: www.johnkaye.org.au
 
mail: Parliament House, Macquarie St, Sydney NSW 2000