Meaningful but targeted regulatory measures are now necessary for rating agencies operating in the structured credit markets in Europe, McCreevy said. The measures will be proposed in the coming months.
Meaningful but targeted regulatory measures are now necessary for rating agencies operating in the structured credit markets in Europe, including registration, external oversight and much better internal governance, Commissioner McCreevy said in a speech held in Dublin.
The measures will be proposed in the coming months, he said concluding "that a regulatory solution at European level is now necessary to deal with some of the core issues."
“The IOSCO Code of Conduct to which the rating agencies signed up has been shown to be a toothless wonder”, he explained. “I am deeply sceptical that the appropriate response lies in building on and strengthening the IOSCO code”, the Commissioner continued.
“Many of the recent IOSCO task force recommendations do not appear enforceable in a meaningful way and I am now convinced that limited but mandatory, well-targeted and robust internal governance reforms are going to be imperative to complement stronger external oversight of rating agencies”, he said.
McCreevy also did not share ESME's view that regulation of the rating agencies could be seen as some sort of official endorsement of the ratings they disseminate. “Rating agencies have already been given recognition, legitimacy, and implicit trust in key pieces of European financial services regulation that is designed to underpin financial stability and investor protection –including UCITS and the CRD”, he said.
Full speech
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