EU states reach deal on rating firms
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Reuters
Oluşturulma Tarihi: Mart 05, 2009 00:00
BRUSSELS - European Union states reached a deal yesterday on introducing mandatory registration and direct supervision of credit rating agencies, a spokesman for the Czech EU presidency said.
The sector has been criticized as failing to warn investors about risks in subprime-related products. Ambassadors for the 27 EU states voted in favor of the measure, authored by the bloc's executive European Commission, that will affect companies such as Standard & Poor's, Moody's and Fitch.
"EU ambassadors reached a preliminary deal on a measure to regulate agencies," the spokesman said. The European Parliament has joint say on the measure and is due to vote in committee this month followed by a full session in April. Formal endorsement from EU finance ministers will also be needed. EU Internal Market Commissioner Charlie McCreevy, who authored the measure, has said ratings agencies failed to "sniff the rot" at the heart of securitized products which they rated highly but quickly became untradeable as underlying home loans defaulted.
The United States criticized the draft measure for its "extraterritorial" effects as it would directly affect how ratings agencies went about their business outside the EU. S&P and Moody's are U.S. companies and the compromise reached yesterday will ease spillover effects.
"EU ambassadors reached a preliminary deal on a measure to regulate agencies," the spokesman said. The European Parliament has joint say on the measure and is due to vote in committee this month followed by a full session in April. Formal endorsement from EU finance ministers will also be needed. EU Internal Market Commissioner Charlie McCreevy, who authored the measure, has said ratings agencies failed to "sniff the rot" at the heart of securitized products which they rated highly but quickly became untradeable as underlying home loans defaulted.
The United States criticized the draft measure for its "extraterritorial" effects as it would directly affect how ratings agencies went about their business outside the EU. S&P and Moody's are U.S. companies and the compromise reached yesterday will ease spillover effects.