EU Looks to Launch Rating Agency In Mid-2011

April 7, 2011 by · Leave a Comment
Filed under: The Rating Agencies, The Ratings System 

Michel Barnier, the European Union’s (EU) financial services commissioner announced at a press conference that they will create “a new [rating] agency, particularly with a European dimension” and “new ways of dealing with sovereign debt ratings by the middle of 2011.”

The European Council presented their plan at a recent meeting of EU finance ministers and central bank heads in Brussels. In a copy of the proposal secured by Bloomberg News, the council rationalized the initiative by saying that the “economic and political implications” of sovereign-debt ratings mean “it is particularly important that ratings of this asset class be accurate, timely and transparent.”

At the same meeting, ministers discussed rules to force rating companies to disclose reasons for changing a sovereign-debt rating. Following the meeting, Swedish Finance Minister Anders Borg also made clear that ministers were “ready to discuss” fines for ratings companies who mislead investors with poor quality ratings.

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