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Ratings agencies criticised
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Ratings agencies are likely to emerge as one of the bigger losers from the global financial crisis because of some of the ratings they handed particular products, according to the chief investment officer of Victorian Funds Management Corporation (VFMC), Justin Pascoe.
Addressing an Asset Allocation Summit in Sydney this week, Pascoe signalled that the performance of the ratings agencies in the lead-up to the global financial crisis had persuaded the VFMC to change its approach and to place greater reliance on other methods.
He said the global financial crisis had served to highlight the manner in which ratings agencies were paid and the conflict issues that then arose, particularly where it could be suggested that they had received payments for particular ratings.
“I do not think ratings agencies will get their reputations back very quickly,” Pascoe said.
AUTHOR
Mike Taylor
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