Brussels, 04/05/2010 (Agence Europe) - Commenting on 4 May 2010 on the preliminary outcome of the consultation with stakeholders on the new EU rules for derivatives, EU Internal Market Commissioner Michel Barnier said that the obligation to pay for derivatives should not apply to non-financial companies. He added that under the draft legislation the European Commission will be unveiling next month, non-financial companies will be required to manage the risk of derivatives that have not yet been paid for, and that in the event of risk to financial stability, the duty to pay up would apply. He said the Commission would be monitoring the situation to ensure this decision was not sidelined by the financial industry and ensure it does not pave the way for regulatory tourism. He said the EU's approach was generally in line with discussions under way in the United States.
In line with G20 guidelines, the draft EU directive would require the finance industry to pay for standard derivatives using centralised clearing houses (CCP) and for all derivatives to be registered in trade repositories. In response to a question from MEP Pascal Canfin (Greens/EFA, France) on having a CCP in a eurozone country for all transactions in euros and on the interoperability of CCPs, the commissioner said the issue was highly sensitive but the EU had to have resources to match its sovereignty and he was setting two objectives for properly supervised and properly financed CCPs, namely boosting security and increasing competition on the markets.
Rating agencies. On the role of credit rating agencies in junking Greece's debt and increasing its finance roll-over costs, Barnier said that in light of the impact of the ratings agencies' decisions, the Commission was entitled to expect them to take a responsible attitude and make any changes to their ratings in line with wholly transparent reasoning. He said the implementation from December 2010 onwards of EU Regulation 1060/2009/EC should lead to progress in this domain although it was not clear whether the new regulation would be enough in itself. Before the summer holidays, the Commission will be unveiling a new regulation to give the new European Financial Market Agency (from the financial supervision package of legislation) the power to control rating agencies registered in the EU.
Asked by several MEPs to look into the idea of an EU rating agency, Barnier said he was thinking about how to increase diversity into the ratings industry, currently dominated by three big companies, Moody's, Standard & Poor's and Fitch, by the introduction of a European agency. He said it was too early to say whether such an agency would be a public or private body or whether it would focus solely on the rating of sovereign debts. Jean-Paul Gauzès (EPP, France) wondered whether it was certain that an EU agency would do better than the other agencies, arguing that the problem arises mainly from the disproportionate importance given to rating agencies scores by the financial industry. Speaking to a handful of reporters, Gauzès (former EP rapporteur on rating agencies) said he thought the idea of an agency to assess the financial situation was a good idea as long as it did not only examine a country's ability to pay back its loans but also the underlying economic situation and financial perspectives, something that rating agencies do not do. (M.B./transl.fl)