Follow Us

Follow us on Twitter  Follow us on LinkedIn

Article List:

 

Credit ratings help investors and lenders to understand the risks associated with a particular investment or financial instrument. However, over-reliance on credit ratings may reduce incentives for investors to develop their own capacity for credit risk assessment.

In the period leading up to the financial crisis in 2008, credit rating agencies (CRAs) failed to properly appreciate the risks in more complex financial instruments. For instance, structured finance products backed by risky sub-prime mortgages were issued with incorrect ratings that were far too high.

In response, the Commission made proposals to strengthen the regulatory and supervisory framework for CRAs in the EU, to restore market confidence and increase investor protection. The new EU rules were introduced in three consecutive steps.

  • The first set of rules, which entered into force at the end of 2009, established a regulatory framework for CRAs and introduced a regulatory oversight regime, whereby CRAs had to be registered and were supervised by national competent authorities. In addition, CRAs were required to avoid conflicts of interest, and to have sound rating methodologies and transparent rating activities.
  • In 2011, these rules were amended to take into account the creation of the European Securities and Markets Authority (ESMA), which supervised CRAs registered in the EU
  • A further amendment was made in 2013 to reinforce the rules and address weaknesses related to sovereign debt credit ratings

CRAs directive

CRAs regulation








Welcome to the GrahamBishop Archive.

If you would like access to more current information please subscribe to our friends membership.

Credit Rating Agencies - 20199 articles out of 9.

Credit Rating Agencies - 201817 articles out of 17.

Credit Rating Agencies - 201712 articles out of 12.

Credit Rating Agencies - 201612 articles out of 12.

Credit Rating Agencies - 201521 articles out of 21.

Credit Rating Agencies - 201417 articles out of 17.

Credit Rating Agencies - 201316 articles out of 16.

Credit Rating Agencies - 201232 articles out of 32.

Credit Rating Agencies - 201143 articles out of 43.

2010 Credit Rating Agencies
2010-12-15 EU watchdog placed at the heart of credit rating agency supervision
2010-12-06 ECON committee own initiative report on the future perspectives of Credit Rating Agencies
2010-11-22 FT: French watchdog in credit rating alert
2010-11-05 European Commission consults on further policy in the field of credit rating agencies
2010-10-28 FSB published principles for reducing reliance on CRA ratings
2010-10-18 CEPS paper on reforms for the credit rating industry
2010-09-29 IMF: Reducing role of credit ratings would aid markets
2010-09-01 El País: S&P report reveals that the European recovery will be at two different speeds
2010-07-16 AMF published its 2009 report on credit rating agencies
2010-06-15 European Parliament - oral questions to Commissioner Barnier + Video
2010-06-02 Commission proposal to improve EU supervision of Credit Rating Agencies

Prior Years Reports


Credit Rating Agencies - 200914 articles out of 14.

Credit Rating Agencies - 200826 articles out of 26.

Credit Rating Agencies - 200710 articles out of 10.

Credit Rating Agencies - 20067 articles out of 7.

Credit Rating Agencies - 20052 articles out of 2.

Credit Rating Agencies - 200411 articles out of 11.

Credit Rating Agencies - 20031 articles out of 1.