I think there is a need to applaud the courage shown by Standard & Poor's in downgrading the AAA Sovereign Rating of the US. I can imagine the tremendous pressure on them not to do so, but there is a limit to everything. You can imagine the condition India would have found itself in, had our Reserve Bank acted like the others in the developed world (particularly the US), and not had a strict control on our banks and financial systems in the last crisis. Most of the rating agencies were to blame for the last derivatives-led recession or collapse of financial markets. They are there to do a job, and they must do it. The consequences are not their problem. The consequences of NOT doing their job would be far worse.
What will happen now is anybody's guess. But regardless of what does happen, at least S&P's can hold its head high.
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2 comments:
The world (more so the financial world) would be a far better place if people just did their job well instead of trying to be spectacular. I always felt that finance is a conservative business and financial discipline should be enforced as strictly as old school grannies did to keep things realistic. Derivatives, futures, crazy valuations, unbelievable projections - few will make a killing but many will be left at the end of the line with nothing. Efficient work is the only way to produce better, to have a healthy system of demand and supply. One cannot tinker with these without such results. But what never ceases to amaze is how many more instances do they need to wake up. Far as S&P are concerned - great job! This is a case of someone doing their job well.
I think Standard and Poors showed Poor Standards earlier and are trying to make up.
Whoever chose that name must be kicking himself.
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