As is well known, the serious shortcomings in the regulation and supervision of international finance were among the underlying causes of the recent crisis. The crisis also eloquently showed the contradictions between a financial system and banking groups which operate as global companies while being regulated and forced to go under as bodies covered by domestic law.
The Committee takes the view that the EU has reacted actively with regard to the regulation of Credit Rating Agencies, not least with the proposal in question, stimulating similar reactions at international level. The Committee calls for this work to be pursued steadily and consistently.
The Committee also considers that swift action is needed to end the differences between the level of integration of the financial market and that of financial supervision (still in the hands of the Member States).
However, while mindful of the complexity of the subject, the Committee regrets the delay in entry into force of the regulation.
The EESC is also concerned about the specific nature of sovereign debt and, in particular, the failure to set up a European body for assessing sovereign debt. We look forward to the outcome of the public consultation which is now under way1.
The Committee attaches great importance to making European subsidiaries of agencies whose parent company is outside the EU subject to the new supervision rules. It also considers that restoring consumer and investor confidence in the financial market is vital.
Rating agencies can carry out effective rating of sovereign debt provided they have the proper instruments and methods and observe the rules laid down by the relevant public authorities.The Committee welcomes the fact that the relevant legislation reduces Member States' room for discretion. This will make it easier to exchange information and ensure consistency of different countries' legislation, to prevent the effects of European supervision being cancelled out.
The Committee proposes moving on from the current system of self-regulation, also at international level. The process of coordinating the various competent authorities needs to be pursued, with strict rules to apply to all devised and the certainty that they will be enforced.
The Committee approves of the Financial Stability Board's proposal to do away with the obligation for rating agencies to rate securities in order for them to be sold.
1 Public consultation on Credit Rating Agencies of 5.11.2010.