Can we believe those rating agencies ever again?

Short answer: No. Here is the long-answer. It’s rather bizarre.

Spanish bank fields Ronaldo as collateral
By Philip Aldrick, Economics Editor. The Telegraph

Cristiano Ronaldo, the most expensive footballer in history, has joined the European Central Bank (ECB) on a free transfer. Sources say the authorities want his help on the sovereign debt crisis – by kicking the can further down the road.

Well, not quite. But Ronaldo could feasibly become ECB property after he was pledged as collateral for emergency liquidity support by Spain’s struggling savings bank, Bankia. In 2009, one of the Spanish banks that has since become Bankia lent Real Madrid €76.5m (£67m) to pay the transfer fees for both Ronaldo and Kaka, the Brazilian forward.

It has now emerged that Bankia has put up the loan as collateral with the ECB in return for vital funding. If both Bankia and Real Madrid go bust, the ECB would own the two “galácticos”.

The loan was rated AAA by Moody’s, which judged the £80m Real Madrid paid Manchester United for Ronaldo and the £56m fee to AC Milan for Kaka a gilt-edged security – as safe as US government debt – for what that’s worth. It is not known whether the ECB imposed a haircut on the collateral, though it is thought unlikely the Portuguese winker would have consented without advice from a professional stylist.

Collateralising the footballers is part of a rescue plan that has already seen Bankia take €4.5bn in state support. It was created earlier this year from the merger of seven troubled regional banks, becoming the country’s largest savings institution. It plans a public listing to raise funds and bolster its finances.

The board is hoping the shares don’t take a dive.