[Greens-Media] US Congress condemns credit rating agencies driving Rees' mini-budget

[John Kaye]

US Congress condemns credit rating agencies driving Rees' mini-budget
 
Media Release: 23 October 2008
 
New evidence of misleading advice and mismanagement by credit ratings
agencies underlines the need for the Rees government to break free of
their stranglehold on the NSW economy, according to Greens MP John
Kaye.
 
Yesterday the U.S. Congress Committee on Oversight and Government
Reform held special hearings on "Credit Rating Agencies and the
Financial Crisis". Internal memos were tabled demonstrating that
Standard & Poor's and Moody's knew they were giving dangerous AAA
ratings to dubious debt products, and even predicted the economic crisis
now affecting the whole world.
 
The Chairman of the Committee, Rep Henry Waxman, summed up the problem
by saying: "The story of the credit rating agencies is a story of
colossal failure."
 
Dr Kaye said: "Stunning testimony before the Congress Oversight
Committee demonstrates the appalling mismanagement and lack of quality
control at the credit ratings agencies.
 
"These are the same agencies that Premier Nathan Rees and Treasurer
Eric Roozendaal are trying to appease with burnt offerings in next
month’s mini-budget.
 
"The evidence presented to the U.S. Congress reveals that the rating
agencies are driven by an obsession with market share and lack objective
standards to rate products.
 
"The Premier and Treasurer have ceded to these market cowboys effective
veto powers over the NSW budget. This is an appalling failure of
governance.
 
"The Rees government must free itself from rating agencies whose record
of mismanagement is being thoroughly exposed.
 
"Long-term investment and budgetary measures to smooth out the
inevitable peaks and troughs of the market economy should be the focus
of the mini-budget," Dr Kaye said.
 
ENDS
 
Note: Rep Waxman's comments to the Oversight Committee can be found at
http://oversight.house.gov/documents/20081022102221.pdf 
 
For more information: John Kaye 0407 195 455