What is the appropriate role of independent credit ratings in the financial system? That is the question raised by recent events in the eurozone and one that has prompted a flurry of suggestions from European policymakers, from intervening in ratings methodologies to suspending certain sovereign ratings.

Eurozone governments are making strenuous efforts to tackle the very serious challenges facing the bloc and to secure near term liquidity support for those most affected. But moves to limit the independence of credit ratings would be counter-productive.

As many commentators have pointed out, such steps would reduce transparency, exacerbate uncertainty, further damage confidence in European markets, and potentially raise the risk premium demanded by investors. They also detract from efforts to improve economic competitiveness and growth and secure longer term solvency of certain eurozone sovereigns.