News
The Commission considers its current regulatory framework for credit ratings to be insufficient and is seeking to toughen the framework against the backdrop the current Eurozone difficulties.
Internal Market Commissioner of the EU Commissioner, Michel Barnier stated:
"Ratings have a direct impact on the markets and the wider economy and thus on the prosperity of European citizens. They are not just simple opinions. And rating agencies have made serious mistakes in the past. I have also been surprised by the timings of some sovereign ratings – for example ratings announced in the middle of negotiations on an international aid programme for a country. We can't let ratings increase market volatility further. My first objective is to reduce the over-reliance on ratings, while at the same time improving the quality of the rating process. Credit rating agencies should follow stricter rules, be more transparent about their ratings and be held accountable for their mistakes. I also want to see increased competition in this sector."
Many will say that while this might be necessary it will not address the underlying issue affecting the Eurozone - i.e. unsustainable debt.
Published: 17 November, 2011