20 August 2012

AMF publishes 2011 report on credit rating agencies

The AMF's annual report on credit rating agencies (CRAs) covers CRA supervision, international regulatory developments, and credit ratings. It also provides an opportunity for the regulator to review Europe's new supervisory framework.

With adoption and entry into force in 2011 of the revised CRA Regulation of 16 September 2009, the European Securities and Markets Authority (ESMA) has been given exclusive responsibility for the direct supervision of CRAs, its first area of competence in terms of registration and oversight. ESMA has gradually taken over direct authority from the AMF in this area since 1 July 2011, a transfer that was completed with the registration of the local subsidiaries of the three main agencies on 31 October 2011.

ESMA now has exclusive registration, supervision and oversight powers over CRAs in the European Union. The AMF is publishing its eighth annual report on CRAs. This year’s report contains the translations into French of ESMA’s first two reports, dating from January and March 2012 respectively, on CRA implementation of the European legislation and CRA supervision.

The AMF’s 2011 report also reviews international regulatory developments over the year, including the delegated regulations adopted by the European Commission in February and March 2012. It explores future issues, in particular the need to reduce over-reliance on ratings. The Commission issued proposals on this topic in November 2011, including the requirement for financial institutions to carry out their own credit assessments and measures to limit the use of ratings by European supervisory authorities themselves.

In the section on credit ratings, the report finds that the perception of credit risk has worsened further in France and Europe generally as a direct result of the euro area sovereign debt crisis. At end-June 2012, 12 of the 17 Member States had been downgraded at least once in the previous 12 months. Companies have also been affected by the trend: one-third of issuers saw their ratings lowered by at least one notch in 2011, with downgrades heavily concentrated in the banking sector.

Press release

Full report (in French only)

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