Brussels, 12/04/2011 (Agence Europe) - The regulation giving the European Securities and Markets Authority (ESMA) the power to scrutinise financial ratings agencies registered in the European Union was formally endorsed by the EU Council of Ministers on Monday 11 April, following agreement in principle at the end of 2010 (see EUROPE 10278). The regulation changes EU rules that require credit rating agencies to register with the supervisor of the country in which they are located.
Following the series of downgradings of the sovereign debt of eurozone countries, the European Commission has been looking at ways of tightening up the rules and says it will be unveiling root-and-branch reforms after the summer break to change the oligopolistic nature of the markets (dominated by the Big Three), increasing the independence of financial players from external ratings and clamping down on conflicts of interest that arise when clients pay rating agencies for their own rating (see EUROPE 10348). (M.B./transl.fl)