EU considers banning ratings of sovereign debt

If those pesky ratings weren’t there, then of course everything would be better.

EU leaders are desperately grasping at straws now. If this is what they’re spending their time on, things could get very ugly.

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The European Union set out proposals for strict new regulations on credit-rating firms today in a move, it said, was aimed in part at diversifying the industry.

As expected, the proposals included a number of measures the largest rating firms–Moody’s Investors Service Inc., Standard & Poor’s Corp. and Fitch Ratings–have staunchly opposed. The launch of the proposals was delayed Tuesday afternoon because of last-minute wrangling over key details, a person familiar with the discussions said.

One of the issues still being debated was a proposal to give the European regulatory agency power to temporarily ban ratings of sovereign debt in exceptional circumstances. The Commission said again Tuesday there will be some kind of ban in the final text but details are still pending.