Bruxelles turns regulatory eye on rating agencies - by Lucia Kubosova
The European Commission has unveiled a proposal to regulate credit rating agencies, boasting the blueprint goes further than legislation anywhere else in the world in its attempt to prevent future turbulence based on false ratings of various market actors. "These very exciting rules are necessary to restore the confidence of the market in the ratings business in the European Union," said EU internal market commissioner Charlie McCreevy when presenting the document to journalists on Wednesday (12 November).The package includes measures aiming to boost the transparency of the bodies whose malpractice is viewed by some policy makers as one of the factors behind the current financial crisis - by introducing an obligation for them to disclose the models, methodologies and key assumptions on which they base their ratings.
Apart from a broader disclosure, credit agencies will in future have to undergo a newly established registration procedure and face an "effective surveillance regime" by European regulators, under the proposed rules.
