Rating agencies are obliged to act with utmost responsibility

On June 1, the European Union's market regulator fined Moody's German branch 750,000 ($844,900) and British branch 490,000 for failing to abide by the EU's rating regulatory rules. The EU move, together with Beijing's rebuttal of Moody's downgrading of China's credit rating, reflects the controversial role rating agencies play in the global economy.

The European Securities and Markets Authority said in a public notice that Moody's German and British branches "negligently committed two infringements of the Credit Rating Agencies Regulation regarding their public announcement of certain ratings and their public disclosure of methodologies used to determine those ratings".

Late last month, Moody's downgraded China's credit rating for the first time in nearly 30 years, citing the country's expected erosion of financial strength in the coming years following slowing growth and debt pile-up. In response, the Ministry of Finance said Moody's overestimated the risks to the Chinese economy and the downgrading was based on "inappropriate methodology".