Eu sets curbs on credit rating agencies

EU markets commissioner Michel Barnier (pictured) presented new curbs on international credit rating agencies Tuesday, but had to back down on plans to allow the temporary suspension of ratings for countries under EU-IMF bailout programmes. The European Union pushed ahead with its regulatory crackdown on Tuesday, giving the green light to curbs on trading of the sovereign-debt related derivatives that sit at the heart of the euro zone crisis. The bloc’s financial services chief Michel Barnier also unveiled a measure to inject competition into the credit ratings sector, a move that was met by stiff criticism from one key sector player. After opposition from countries like Britain, however, Barnier withdrew a provision from the draft law that would have introduced temporary “blackouts” on ratings of countries when bailouts are being organised for them. Many EU policymakers are keen for tougher rules for the sector, saying a ratings downgrade of Greek sovereign debt last year made it more expensive and harder to mount the country’s first bailout package. “I proposed a postponement on this to go further into the technical detail. We have some time to look at possible arrangements as to which the European Securities and Markets Authority could intervene in this way,” Barnier told a news conference. The sector is dominated by three players; Standard & Poor’s , Moody’s and Fitch Ratings, and Barnier wants more competition. The accidental downgrade last week by S&P of France’s banking industry will also reinforce the EU’s determination to regulate agencies more closely. S&P said on Tuesday the new rules are out of step with other regulatory regimes and will damage ratings as a globally consistent benchmark of (Excerpt) Read more at france24.com …