29 January 2004

EMAC final report on rating agencies

The Economic and Monitary Affairs Committee adopted the own initiative report on the role and methods of rating agencies. The report recognizes the positive contributions and usefulness of rating agencies, rejects any attempt at regulatory intervention, and underlines the ‘need for total freedom of expression and for the agencies' independence from political and business influence’.

However, the report also states that the line between the regulation of process and the regulation of content and opinion may prove hard to draw. This, the report says, has to be an important consideration to be taken into account in reaching any regulatory solution.

The report finally calls the Commission to submit assessment of the need for appropriate legislative proposals by July 2005. Furterhmore, the Commission, CESR, the European Banking Committee (EBC) should make specific recommendations in the light of any conclusions of the Financial Services Forum, the IOSCO report on credit rating agencies, and the US SEC as regards the criteria needed to ensure more transparency of the rating agencies’ operations and the need for a review of a regulatory mechanism by 31st July 2005 and periodically thereafter.

Final report

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