Rating the worth of the ratings agencies

Should Australians be worried by reports of a potential downgrade to the nation's prized AAA credit rating? Probably not.

Credit rating agency Standard and Poor’s has hinted that it might review Australia’s prized AAA credit rating if the Senate  fails to pass at least “some” of its $37 billion in planned savings, according to The Australian Financial Review.

The bond market reacted coolly to the news, with yields for both two-year and 10-year government bonds only nudging up slightly.  Should we be concerned about a potential downgrade of Australia’s gold-plated AAA credit rating?

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