MercoPress. South Atlantic News Agency

Economics Nobel Prize Stiglitz favours regulation of risk rating agencies

Nobel Prize Joseph Stiglitz

Economics Nobel Prize Joseph Stiglitz said it was time to end with the “authority” that countries have deposited in risk assessment agencies and which “have not done things correctly” and have been an essential factor in giving “the global crisis a nice boost”.

“Risk agencies have contributed to the instability of markets”, and should be regulated said Stiglitz during a presentation at a Madrid conference on “Taxing to prevent financial speculation”.

He added that in spite of the stimuli and consolidation measures undertaken by the different European Union countries, “markets will be difficult to satisfy”.

Regarding the drastic measures adopted by EU countries in support of the Euro, the Nobel Prize said they have concentrated in budget deficit reductions, “which could involve some risks” and therefore recommends countries to jointly address the adverse effects they could be facing.

Asked about the proposal to tax US financial institutions to recoup taxpayers’ money spent in rescuing the banking sector and the contingency fund the EU wants to create for future rescue of banks, Stiglitz said the best was “to anticipate” but whatever is decided and undertaken “must have a commitment from the financial sector”.