Credit rating agencies

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Credit rating agencies

Key points:

The EESC thinks that the Commission's reaction is tardy and does not go far enough as regards quality, transparency, independence and competition.

The EESC very much doubts that the hoped-for results can be achieved simply by tightening up the rules, which would serve rather to reduce the responsibility of the various monitoring bodies even further. These bodies should, on the contrary, be more involved in evaluating the ratings issued by agencies.

The proposal gives no clear indication as to how regulation is to be implemented. It also needs to be taken up at the G 20 level to ensure consistency worldwide.

More specifically, the EESC proposes:

  • Penalties for directors and managers of the European and international market supervision authorities who fail to meet their obligations;
  • To strengthen civil liability in the most coherent and effective way possible;
  • Improvement of  actual protection of consumers of financial products,
  • To set up an independent European rating agency that would issue independent ratings;
  • In order to guarantee independence, it must be ensured that no investor owns – even indirectly – more than a certain percentage of the agency's capital and some measures which go beyond the Commission's rotation rule (agency to be chosen by draw) are proposed;
  • A more detailed response from the Commission is required for sovereign debt ratings.