Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-01-13-Speech-2-363"
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"en.20090113.28.2-363"2
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"The Commission has closely followed the activity of the credit rating agencies (CRAs) over the past few years. Following the European Parliament’s resolution on credit rating agencies in February 2004, the Commission considered very carefully what legislative measures would be necessary to regulate the activities of credit rating agencies.
In line with the advice received from the Committee of European Securities Regulators (CESR) in March 2005, the Commission adopted in 2006 a communication on credit rating agencies. In this communication the Commission concluded that various financial services directives, combined with self-regulation by the credit rating agencies, on the basis of the IOSCO Code of Conduct, the methods for CRAs could provide a satisfactory answer to the major issues of concern in relation to credit rating agencies. It is stated that this approach would require continuous monitoring of developments by the Commission.
In addition, the Commission asked CESR to monitor compliance with the IOSCO Code and to report back on an annual basis. At the same time, the Commission indicated in the communication that it might consider putting forward legislative action if it became clear that compliance with EU rules or IOSCO’s Code was unsatisfactory or if new circumstances were to arise, including serious problems of market failure or significant changes in the way credit rating agencies are regulated in other parts of the world.
The financial crisis shed a new light on CRAs. Since August 2007 the financial markets worldwide suffered from a major confidence crisis. This financial crisis is a complex phenomenon involving multiple actors. The credit rating agencies are close to the origin of the problems that have arisen with subprime markets. The crisis highlighted poor performance by credit rating agencies. An explanation could be found in the unsatisfactory way the agencies managed their conflicts of interest, the lack of quality of the methodologies they issue, insufficient transparency around their activities or the inappropriate internal governance in the agencies.
The subprime crisis demonstrated that the framework for the operation of credit rating agencies needs to be significantly reinforced. That is why in June 2008 I announced that the Commission would take regulatory action in this area and on 12 November 2008 the College adopted the proposal covering regulatory activity of credit rating agencies with the agreement of this Parliament and of the Council."@en1
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