Brussels, 18/03/2013 (Agence Europe) - In a report published on Monday 18 March 2013, the European Securities Markets Authority (ESMA) highlighted a number of areas where credit rating agencies must improve their performance. ESMA examined the methodology of the Big Three (Moody's, S&P and Fitch) and says they have not done enough to incorporate requirements laid down by EU rules in the fields of integrity, transparency and good governance, and must improve their internal organisation to be able to deal with concerns over inherent conflicts of interests in their business mode, says Steven Maijoor, the head of ESMA.
The importance of ratings on the financial markets means that the agencies must, as a matter of urgency, identify and address problems that could undermine their independence, objectivity and the quality of their ratings, he argued. Reuters was only able to get someone from Moody's to comment on the report, who said that Moody's was fully determined to comply with EU regulations.
Earlier this year, the European Union adopted a series of measures on the work of rating agencies (see EUROPE 10764), which have been accused of causing deteriorations in the credit rating of struggling countries. The rating agencies will in future have to issue rating changes according to a pre-established calendar. Failure to respect the new rules could lead to court cases, without prejudice to investors. (EL/transl.fl)