The draft ITS were prepared by the Joint Committee of the European Supervisory Authorities (EBA, EIOPA, ESMA - ESAs) and submitted to the EC via the Joint Committee in November 2015. In these ITS, the ESAs had particularly proposed "less conservative" quantitative requirements to apply for a phase-in period of three years. Thus, the External Credit Assessment Institutions' (ECAIs
could receive the best mapping based on their past performance, irrespective of how many ratings they have already produced. Upon expiry of the phase-in period, from 2019 onwards, the Joint Committee intended to apply a "more conservative" approach, requiring ECAIs to issue a minimum number of ratings in order to receive the best mapping.
On 30 March 2016, the EC informed the Joint Committee of its intention to amend the draft ITS by extending the "less conservative" approach to the mapping of ECAIs.
In their Opinion, the ESAs express their disagreement with the EC's proposal since favoring competition aspects over prudential considerations increases the risk to financial stability and is not in line with the mandate given to the ESAs.
The Joint Committee believes that the initial draft ITS represent a good balance of prudential objectives and at the same time sufficiently promote market competition in the credit rating industry.
Press release
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