Should Regulations Be Tightened on International Credit Rating Agencies?
(THOMAS COEX/AFP/Getty Images)
March 13, 2012
| Economics
| Europe
The enormous influence over the international economy of the three leading agencies that grade corporate and sovereign debt — Standard and Poors (S&P), Moody’s, and Fitch — has long been controversial and has led to calls for international regulations, especially during hard economic times. Due to the current European economic debt crisis, the European Union is considering new measures to tightly regulate these agencies, limit their independence, and require a rotational scheme where companies would be forced to change their rating agencies regularly. Could these new regulations do more harm than good to the world economy?

On March 7, DBRS, a Canadian Credit Rating Agency, expressed support for new proposals by Michel Barnier, the European Commission (EC) Internal Market and Services Commissioner, to regulate international credit agencies.  According to the Financial Times, DBRS believes forcing companies to change rating agencies frequently would increase competition and prevent “group think.”  Barnier hopes to improve upon other regulations introduced in 2010 that some EU states believe have been ineffective.

Comments or questions about this article? Click here to contact us.
Login or Create New Account
Email Address:
New to LIGNET? Create New Account
GET FREE Intelligence Reports

LIGNET provides you with actionable intelligence and in-depth analyses from seasoned insiders including senior CIA officials, presidential advisors, ambassadors, and more.

Sign Up for
FREE Intelligence Reports!
Join Now
Already have an account?
Click here to log in.

Join Now
Knowledge is Power
Only if You Access it!
Upgrade to a full access account and get the official CIA World Fact Book 2014 FREE!
Upgrade Now
FREE CIA World Factbook 2013
What is LIGNET?
Powered by Newsmax
LIGNET is registered in the U.S. Patent and Trademark Office. Langley Intelligence Group Network is registered in the U.S. Patent and Trademark Office.