Regulators warn against ratings plan

Forcing issuers to rotate the agencies that rate their bonds, as proposed by the European Commission, could do more harm than good by opening the door to lower quality ratings by inexperienced analysts, European and UK regulators said on the 29 February 2012

The leaders of the new European Securities & Markets Authority and a senior UK Financial Services Authority official told a UK parliamentary hearing of their grave concerns about mandatory rotation, a central part of the commission’s proposal to tighten regulation of credit rating agencies.

ESO: Background information: Brussels to unveil curbs on rating agencies http://www.europeansources.info/record/brussels-to-unveil-curbs-on-rating-agencies-barnier-backtracks-on-ratings-reforms/

UK: Parliament: House of Commons: Select Committees: Treasury Select Committee: Treasury Committee to question credit rating agencies http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news/committee-to-question-credit-rating-agencies-and-a-range-of-experts-for-its-inquiry-/

---