Commission wants better quality credit ratings

On 15 November the Commission put forward proposals for a regulation and a directive tightening up the existing legislation on credit rating agencies. Credit rating agencies (CRAs) are major players in today’s financial markets, with rating actions having a direct impact on the actions of investors, borrowers, issuers and governments. For example, a corporate downgrade can have consequences on the capital a bank must hold and a downgrade of sovereign debt makes a country’s borrowing more expensive. Despite the adoption of European legislation on credit rating agencies in 2009 and 2010, recent developments in the context of the euro debt crisis have shown that the existing regulatory framework is not good enough. This is why the Commission has put forward proposals to toughen that framework further and deal with outstanding weaknesses.

• Primary Source

European Commission: DG Internal Market and Services: Publications: Single Market News http://ec.europa.eu/internal_market/smn/index_en.htm

ESO: Background information: Commission wants better quality credit ratings http://www.europeansources.info/record/press-release-commission-wants-better-quality-credit-ratings/

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