EP demands more accountability for credit rating agencies
21 March 2011
The European Parliament (EP) voted to approve German Liberal MEP Wolf Klinz's non-legislative report on credit rating agencies that supports measures and initiatives that would make market players more engaged in risk analysis and reduce their over-reliance on ratings.
The report demands agencies be “exposed to civil liability in cases of gross negligence” and calls for the establishment of European Credit Rating Foundation (ECRF) to “foster competition in the quasi-oligopolistic industry structure where three globally active firms dominate the market." The report proposes funding the ECRF with a one-off lump-sum payment to the foundation to ensure independence. Following the initial allocation, the ECRF would be fully self-reliant and finance itself in the market from rating fees.
Draft report
© European Parliament
