Moody’s gets a harsh reply from government
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Hürriyet Daily News
Oluşturulma Tarihi: Aralık 04, 2008 00:00
ISTANBUL - The global crisis, generating turmoil in markets, also causes people to question the trustworthiness of credit rating institutions. Industry and Trade Minister Zafer Çağlayan says the credentials of institutions such as Moody’s are ’not enough to convince him’
The global financial crisis seems to be damaging the reputation of the core of the global economic system. Turkey’s leaders’ confidence in the credit rating institutions seems to be shaken in the wake of the latest financial developments.
"If these institutions [like Moody's] had given the right advice and had led people properly, we probably would not have experienced such a devastating crisis," said Zafer Çağlayan, minister of industry and trade, responding to a statement by Kristin Lindow, senior vice president of Moody's Investors Service Risk Unit. Lindow had claimed at a conference Tuesday in Istanbul that the absence of a deal with the International Monetary Fund, or IMF, would "cause Turkey to face recession."
"[If the ratings agencies had done their jobs properly] the United States would not have faced bankruptcies at the core institutions of the system," said Çağlayan, speaking on the sidelines of the 7th Annual Industry Congress, organized by the Istanbul Chamber of Industry, or ISO, in Istanbul yesterday.
Questioning rating agencies
"The trustworthiness of the credit rating institutions should be questioned," Çağlayan said. "While the current global financial crisis terminated the jobs of the 'wonder boys,' who used to make money from money, it also launched a new era where people actually question credit rating institutions."
"So I just don’t believe in these credit rating institutions, which have so obviously failed the class amid such a global financial turmoil," Çağlayan said.
Responding to a question on whether, as Moody's foresaw, there will be a recession in Turkey in the absence of a new IMF deal, Çağlayan said, "This is out of the question."
"The government is still working on an agreement with the IMF," said Çağlayan. "The IMF is not a stranger to us. We estimate 3 or 4 percent growth for this year. We specified that in our medium-term economic program. Maintaining sustainable growth with the efforts of the private sector is quite important for us. We are taking measures in order to strengthen the domestic market. We truly focus on supporting exports and exporters." Çağlayan said.
"Turkey is not heavily affected by the global crisis, thanks to our discipline in public finance and fiscal policy. Everyone should know that we watch, we see and we know what is going on in our economy. Our government is undertaking serious preparations for any situation that may require its involvement," Çağlayan told journalists.
"When we talk about the growth figures, we talk about the figures that include trade, service and the entire industry. So considering all these components of the economy, we expect Turkey to grow three or four percent this year," said Çağlayan.
"This figure also applies for 2009," said Çağlayan. "We have specified our growth targets in our mid-term program. We planned everything and established our forecasts according to these targets."
"If these institutions [like Moody's] had given the right advice and had led people properly, we probably would not have experienced such a devastating crisis," said Zafer Çağlayan, minister of industry and trade, responding to a statement by Kristin Lindow, senior vice president of Moody's Investors Service Risk Unit. Lindow had claimed at a conference Tuesday in Istanbul that the absence of a deal with the International Monetary Fund, or IMF, would "cause Turkey to face recession."
"[If the ratings agencies had done their jobs properly] the United States would not have faced bankruptcies at the core institutions of the system," said Çağlayan, speaking on the sidelines of the 7th Annual Industry Congress, organized by the Istanbul Chamber of Industry, or ISO, in Istanbul yesterday.
Questioning rating agencies
"The trustworthiness of the credit rating institutions should be questioned," Çağlayan said. "While the current global financial crisis terminated the jobs of the 'wonder boys,' who used to make money from money, it also launched a new era where people actually question credit rating institutions."
"So I just don’t believe in these credit rating institutions, which have so obviously failed the class amid such a global financial turmoil," Çağlayan said.
Responding to a question on whether, as Moody's foresaw, there will be a recession in Turkey in the absence of a new IMF deal, Çağlayan said, "This is out of the question."
"The government is still working on an agreement with the IMF," said Çağlayan. "The IMF is not a stranger to us. We estimate 3 or 4 percent growth for this year. We specified that in our medium-term economic program. Maintaining sustainable growth with the efforts of the private sector is quite important for us. We are taking measures in order to strengthen the domestic market. We truly focus on supporting exports and exporters." Çağlayan said.
"Turkey is not heavily affected by the global crisis, thanks to our discipline in public finance and fiscal policy. Everyone should know that we watch, we see and we know what is going on in our economy. Our government is undertaking serious preparations for any situation that may require its involvement," Çağlayan told journalists.
"When we talk about the growth figures, we talk about the figures that include trade, service and the entire industry. So considering all these components of the economy, we expect Turkey to grow three or four percent this year," said Çağlayan.
"This figure also applies for 2009," said Çağlayan. "We have specified our growth targets in our mid-term program. We planned everything and established our forecasts according to these targets."