“Regularly derided for being one of the causes of the crisis, the ratings agencies will now have to contend with new restrictions in Europe”, writes Les Echos, the day after the announcement of an agreement between the European Parliament and the European Council on a new directive to regulate their activity.
The business daily notes, however, that the measures adopted “clearly fall short of the European Commission’s initial proposals.”
“On sovereign debt, the text stipulates that the agencies will only be allowed to change unsolicited ratings for countries three times a year and on dates that have been determined in advance. This is a far cry from previous proposals put forward by Internal Market and Services Commissioner Michel Barnier, who initially considered an outright ban on ratings of countries receiving international aid.”
“Similarly, the European executive wanted to stimulate competition by imposing an obligation for states and countries to change ratings agencies every three years. However, this measure has not been included and the requirement for rotation has only been retained for complex structured finance instruments.”
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