Dr David Tripe from Massey University School of Banking Studies and Dr Bill Rosenberg of the NZCTU spoke on this topic on Monday 7th November in Wellington.

David explained the role of the rating agencies in relation to corporate and sovereign debt, showed that New Zealand's risk profile lay more with private debt owed through the banks than with government debt, warned against the risks underlying the persistent current account deficit, and concluded that while further downgrades were possible the main risk lay in a sudden drop in ratings which was dependent on the banks' own ratings. A copy of his presentation can be found here.

Bill Rosenberg looked at the philosophy underlying the criteria used by the agencies in evaluating sovereign debt, showing that they looked not only at the levels of debt but also made a political assessment of governments' willingness to pay, in other words their willingness to place debt repayment above other political and social policies. His conclusion was that the development of good social and economic policy should downgrade the significance of the role played by the agencies. Bill's presentation can be found here and a detailed paper here.