The ECB is discussing a plan that would allow the rules on government bond ratings to be canceled in the medium term presented as collateral by Eurozone banks to obtain soft loans, replacing them with their own valuation. This was stated by central bank sources quoted by Reuters, according to whom the European Central Bank is not yet ready, in the short term, to assume the delicate political responsibility of assessing the reliability of the sovereign debt of the countries of the area, replacing the large agencies of international ratings.
Meanwhile, the ECB during the meeting of the Governing Council (and of the General Council) scheduled for today (without any decision on rates) it could decide other measures to help Spain and the Iberian banking system, such as an ad hoc extension of the collateral rules.
According to the same sources, the initiative on the introduction of its own rating system would be a very courageous step by the ECB which would require the use of a team of experts with its own methodology and would once again test the independence of the ECB from political power. A medium-term solution mentioned by the same sources could be coordinated action with the world's major central banks, such as the Fed and the BoE, to permanently reduce the power of large rating agencies such as Moody's, S&P and FitchRatings.
