General observations
The proposed measures are aimed at: (a) reducing excessive reliance on external ratings; (b) mitigating the risks of contagious effects linked to changes in sovereign ratings; (c) improving credit rating market conditions with a view to improving the quality of ratings; (d) ensuring a right of redress for investors; and (e) improving the quality of ratings by reinforcing the independence of credit rating agencies (CRAs) and promoting sound credit rating processes and methodologies. The ECB has a keen interest in regulatory initiatives that reduce reliance on external credit ratings.
The perceived existence of shortcomings in CRAs’ ratings may have important effects on market confidence and possible adverse effects on financial stability. Against this backdrop, the ECB shares the Commission’s specific objective of reducing excessive reliance on external credit ratings, which is in line with the principles established by the Financial Stability Board (FSB) in this field.
The ECB also supports the comprehensive powers entrusted to the European Securities and Markets Authority (ESMA) relating to authorisation and supervision of CRAs. ESMA’s additional tasks under the proposed regulation will contribute to improving credit rating market conditions with a view to improving the quality of ratings and the promotion of sound credit rating processes and methodologies.
Full opinion
© European Commission
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