EU considers creating own rating agency
Monday, 3 May 2010
PARIS, May 2 (Xinhua): The Europe Union was considering to put on table the idea of creating a European rating agency, the European Commissioner for Internal Market Regualtion Michel Barnier declared in an interview published Friday.
"I am considering, no improvisation of the idea, the feasibility and value to add an additional agency, which is European," he said, referring to the influence of a rating agency, in the interview with French financial newspaper Les Echos.
"I think the landscape of the agencies, given their importance, is highly concentrated in a few hands," the French commissioner said.
The rating of debts of Portugal, Greece, and Spain were successively degraded on Tuesday and Wednesday by American rating agency Standard and Poor's (S&P's), provoking a contagion panic on the financial crisis in euro zone.
Three America-based credit rating agencies, S&P's, Moody's Investors Service and Fitch Rating, are three most influential agencies in the sector today.
The role of rating agency, which is responsible for evaluating the financial solidity of a state or an enterprise, have been questioned again in Europe.
The European Union has criticized that the S&P's neglected the fundamental indicators of Greek economy and the aid plan by the euro zone and the International Monetary Fund.
Though not intended to juge the previous rating, Barnier insisted the rating agencies "disciplined and responsible in their evaluation process."
They should be "completely impartial in their assessment" and took everything into account, Barnier added.
According to the commissioner, European Council has set to establish new rules to monitor rating agencies, which are expected to come into force in December.
As to the new supervising rules, he said they would "oblige the agencies, institutions today too secret, to reveal the methodology they use for the evaluation."
"The new rules will prevent the conflicts of interest inherent in their current operation and bring a new and better supervision to their operation," Barnier said.
"I am considering, no improvisation of the idea, the feasibility and value to add an additional agency, which is European," he said, referring to the influence of a rating agency, in the interview with French financial newspaper Les Echos.
"I think the landscape of the agencies, given their importance, is highly concentrated in a few hands," the French commissioner said.
The rating of debts of Portugal, Greece, and Spain were successively degraded on Tuesday and Wednesday by American rating agency Standard and Poor's (S&P's), provoking a contagion panic on the financial crisis in euro zone.
Three America-based credit rating agencies, S&P's, Moody's Investors Service and Fitch Rating, are three most influential agencies in the sector today.
The role of rating agency, which is responsible for evaluating the financial solidity of a state or an enterprise, have been questioned again in Europe.
The European Union has criticized that the S&P's neglected the fundamental indicators of Greek economy and the aid plan by the euro zone and the International Monetary Fund.
Though not intended to juge the previous rating, Barnier insisted the rating agencies "disciplined and responsible in their evaluation process."
They should be "completely impartial in their assessment" and took everything into account, Barnier added.
According to the commissioner, European Council has set to establish new rules to monitor rating agencies, which are expected to come into force in December.
As to the new supervising rules, he said they would "oblige the agencies, institutions today too secret, to reveal the methodology they use for the evaluation."
"The new rules will prevent the conflicts of interest inherent in their current operation and bring a new and better supervision to their operation," Barnier said.