EU steps up attack on major credit ratings agencies - by David Gow

The EU is to set out contentious plans to clamp down on the "oligopoly" of the three main credit ratings agencies and encourage newer European rivals.

On Friday the author of the proposals, EU internal market commissioner Michel Barnier, fired a shot across the bows of the dominant US trio of agencies after the hugely embarrassing error committed by Standard & Poor's on Thursday, when it issued a downgrade of French sovereign debt by mistake.

Barnier, who will unveil his plans on Tuesday, said pointedly that they would create a European framework for civil liability "in the case of serious misconduct or gross negligence" indicating that this was especially relevant in the current case.

"This incident is serious and shows that in the current tense and volatile market situation, market players must exercise discipline and demonstrate a special sense f responsibility," he said. "This is all the more important since we are not talkig about just any market player but one of the biggest rating agencies."

Note EU-Digest: Great initiative by EU internal market commissioner Michael Barnier It is also recommended that not only the credit rating agencies should be scrutinized but also the Anglo Saxon corporate controlled financial communication/news agencies who are continuously on the war path against the EU while downplaying the problems in their own market areas. Its high time we get some balance in financial reporting.

For more: EU steps up attack on major credit ratings agencies | Business | The Guardian