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Agencies have to publish a calendar for the year ahead noting on which day they would make any changes to sovereign ratings. Some agencies publish nothing if there is no change while others have released a statement or report. The big three of Standard & Poor's, Moody's and Fitch have each responded differently to rules laid out by the European Securities and Markets Authority (ESMA). "The calendar is a very new phenomenon and we are looking at whether this is working properly", ESMA Chairman Steven Maijoor said.
ESMA has visited all three major agencies and in December found failings over keeping changes in sovereign ratings confidential ahead of publication. It also found examples of management taking part in determining ratings rather than leaving it to analysts. "They need to get their house in order ... I would say they have improved. We still identify issues and shortcomings that need to be repaired," Maijoor said. ESMA is waiting for the outcome of two cases it has passed to its independent investigations officer to see if there had been violations of EU rules.
Maijoor said it will take many years before the new supervisory regime and rules are fully embedded at rating agencies. "It's very important that this is not a compliance exercise, but this should be about improving fundamentally the objective of high quality ratings in these organizations", Maijoor said.
Sovereign ratings became politically charged at the height of the euro zone crisis, when S&P infuriated Greece in 2011 by cutting the rating of its debt while the country's international bailout was being renegotiated. This led to EU laws to regulate rating agencies and make their decisions more transparent and predictable