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In its request for advice, the Commission asked ESMA to provide input to the issue of sovereign ratings and rating processes including an overview of the market for sovereign ratings, information on optional issues regarding the sovereign ratings, information on sovereign rating processes as well as lessons drawn from ESMA’s supervisory experience.
In this Technical Advice, ESMA identifies several key points concerning the appropriateness of the development of a European creditworthiness assessment of sovereign debt, namely, the independence of the rating process, the review function of rating methodologies, the confidentiality of all rating sensitive information as well as the need to have sufficient resources to ensure the continuity and the quality of the rating process.
The European Commission is expected to submit a report to the European Parliament and to the Council by 31 December 2014.