EU Promises New Regulations for Ratings Agencies

September 6, 2010 by · Leave a Comment
Filed under: Financial Crisis, The Rating Agencies 

Following the European Union’s (EU) $1 trillion deal to ease the financial crisis in Greece that also threatened other member nations, Michel Barnier, the EU’s financial markets chief, said that he will push for new legislation to increase competition among rating agencies, which is believed by many to have aggravated the Greek debt crisis.

Barnier said the agencies did not consider sufficiently that Greece is a member of and backed by the European Union.  “Analyzing the ratings of Greece, which is part of a solidarity group, is not the same as assessing the rating of an isolated country,” he said.

New legislation governing the ratings agencies is now at the top of the list of new rules that the EU plans to develop and implement this year.

“We have to measure the effects of the legislation that will be implemented this year,” Barnier also added that the sector lacks transparency and competitiveness. “There are too few agencies in too few hands,” he said. “We’ll work with the players of the sector to increase competitiveness.”

Great plan. If you don’t like the outcome, change the rules.

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