FSB publishes progress report and interim peer review report on credit rating agency ratings

29 August 2013

The FSB published a progress report on reducing reliance on, and strengthening the oversight of, credit rating agencies. The progress report is accompanied by the interim peer review report on national implementation of the FSB Principles for Reducing Reliance on Credit Rating Agency Ratings.

The progress report includes a summary of the main findings and recommendations of the peer review, describes ongoing work by standard-setting bodies to reduce references to CRA ratings in international standards, and provides an update on work by the International Organisation of Securities Commissions (IOSCO) to improve transparency and competition among CRAs.

The main points of the progress report are as follows:

The interim peer review report includes a structured stock-taking of references to CRA ratings in national authorities’ laws and regulations and of actions taken and underway to reduce those references. A few FSB jurisdictions have not yet completed a stock-taking, and the peer review recommends that they do so by end-September 2013.

While recognising the progress made in implementing the Principles, the peer review has identified several areas where accelerated progress is needed, including that, FSB jurisdictions should:

The peer review has also identified a number of challenges that need to be addressed in order to make further progress in implementing the Principles. These include reducing undue reliance on CRA ratings in international standards as well as in private contracts or private sector investment decisions; identifying suitable alternative standards of creditworthiness; and addressing constraints in the development of internal risk assessment systems, particularly for smaller firms. The second stage of the peer review will analyse these challenges in more detail. The FSB intends to issue the final peer review report in early 2014.

Press release

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