Credit rating agencies have yet to overcome underlying conflicts of interest that have contributed to the current crisis and their approach was a reason for concern, an ECB Executive Board member said. "I am concerned about one development and that's the pro-cyclical attitude of rating agencies," Juergen Stark told German newspaper Stuttgarter Zeitung in an interview published on Friday.
"That means that before the crisis they obviously published ratings that were too favourable, which additionally aggravated the situation," he said. The sector is dominated globally by three agencies, Standard & Poor's, Moody's and Fitch Ratings and was badly tarnished during the financial crisis after highly rated securitized products became untradable, helping to trigger fire sales and bank rescues. Stark sees better conditions emerging on money markets. "We are, by now, seeing a significant improvement in that market.