Tuesday 21 November 2017

Emmet Oliver: We may not like it, but the ratings agencies are right to be sceptical

Emmet Oliver

The pressure remorselessly mounts on Ireland and tempers are getting frayed. The NTMA yesterday took the unusual step of directly criticising the work of Standard & Poor's (S&P), one of the world's three largest ratings agencies.

Not only did the NTMA disagree with the results of the downgrade from AA to AA-, it also described the assumptions behind it as "extreme''. The leading credit analyst with S&P was then subjected to an extremely hostile interview on RTE, even though the analyst, Trevor Cullinan, was making the simple point that the bonds issued by NAMA are a form of government borrowing, albeit backed up by property assets.

While the Government and the NTMA may disagree with the downgrade of Ireland's debt, the tone of their report simply reflects the questions that are already present in the minds of many investors.

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