Credit rating agencies will have to obey additional rules on sovereign debt ratings, including three set dates a year for issuing them, under a deal agreed by the European Parliament, European Council and the European Commission on November 27 2012.
Cross-ownership of agencies and the entities that they rate will be limited to prevent conflicts of interest and agency mergers will be restricted to boost competition.
“It was a very difficult process, but we have taken the existing legislation a step forward on a path which will have to be explored further,” said lead MEP Leonardo Domenici, an Italian social democrat.
Some MEPs argued that more must be done to curb the behaviour of agencies whose ratings may be ill-timed or ill-founded and thus aggravate the economic crisis. They believe that the rating market needs more competition, and that rated entities should develop their own rating capacities to counterbalance those of the agencies.
(Photo: G Schouten de Jel)