Europe and the Ratings Agencies

http://www.futureofcapitalism.com/2010/04/europe-and-the-ratings-agencies

Given how badly the ratings agencies overrated mortagage-backed securities, "it is astonishing and sad that investors still seem to quake when Standard & Poor's junks Greece and downgrades Spain," writes Hugo Dixon.

Just as the ratings agencies can overrate companies and securities in good times (lowering their cost of capital), they can underrate companies and securities in tough times (increasing their cost of capital).

by Editor  |  Apr 30, 2010 at 8:30 am Related Topics:  Europe receive the latest by email: subscribe to the free futureofcapitalism.com mailing list