Downfall of a dynasty

Downfall of a dynasty

The last days of Ricardo Salgado and Banco Espírito Santo

Iran's pivotal moment

Iran's pivotal moment

Tehran is at a crossroads…

Can anything cut the power of the rating agencies?

If there was one set of intermediaries the vast majority of the financial markets would like to see the back of, it’s the ratings agencies. But they’re so enshrined in the fabric of the markets, even their biggest critics struggle to conceive a way of doing so.


In a 1996 interview on PBS’s News Hour, the New York Times Pulitzer prize-winning journalist Thomas Friedman said: "There are two superpowers in the world today in my opinion. There’s the United States, and there’s Moody’s Bond Rating Service [sic]. The United States can destroy you by dropping bombs, and Moody’s can destroy you by downgrading your bonds. And believe me, it’s not clear sometimes who’s more powerful."

The main credit rating agencies, among which Fitch Ratings, Moody’s Investors Service and Standard & Poor’s are dominant, have long defended their judgement calls on the creditworthiness of the world’s governments, financial institutions and companies as mere opinion, and seemingly nothing more.

Indeed, it could be argued that these agencies played a crucial role in the financial crisis of 2007/08 – not through...


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Final days of Ricardo Salgado and Banco Espírito Santo

Euromoney Pulse Survey: Renminbi’s internationalization continues apace
When BES collapsed earlier this year, markets briefly feared a return of the crisis to Portugal and to Europe. Even after the bank's bailout, investigators still pore over bank documents, transfers and deals, trying to make sense of Salgado’s last days battling to keep his empire afloat. The backstory is of an extraordinary decades-long rivalry between the country's two pre-eminent business families.