Regulating Credit Rating Agencies: the new US and EU law--important steps or much ado about nothing?

Möllers, Thomas M. J.

doi:10.1093/cmlj/kmp034

Cited by 7 publications

(8 citation statements)

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“…31 See Darbellay and Partnoy (2012), at p. 3: 'Information intermediaries function best when they have reputational capital at stake and will suffer a loss if their assessments are biased, negligent, or false.' 32 Amtenbrink andDe Haan (2009), at p. 1943;Möllers (2009), at p. 478; ESME's Report 2008, supra n. 16, at p. 9. 33 Amtenbrink andDe Haan (2009), at p. 1943.…”

Section: Credit Rating Agencies and The Financial Crisismentioning

confidence: 99%

“…34 ESME's Report 2008, supra n. 16, at p. 9. 35 Möllers (2009), at p. 478. Regulatory Evolution of the EU Credit Rating Agency… price in the case of default.…”

Section: Credit Rating Agencies and The Financial Crisismentioning

confidence: 99%

“…47 Darbellay and Partnoy (2012), at p. 4. 48 Möllers (2009), at p. 491. 49 Amtenbrink andDe Haan (2009), at p. 1921;Möllers (2009), at p. 479;Alexander (2014), at p. 304;, at p. 1085.…”

Section: Oligopolistic Structure Of the Rating Marketmentioning

confidence: 99%

“…62 Manns ( ), at pp. 1048Manns ( -1050Möllers (2009), at p. 482. See also Mathis et al (2009). reputable competitors exist to which market participants could divert their rating orders.…”

Section: Oligopolistic Structure Of the Rating Marketmentioning

confidence: 99%

“…However, concerns have been raised that CRAs use unsolicited ratings as a tool to increase their market share. 86 A low unsolicited rating which does not adequately reflect the creditworthiness of an issuer can, if the respective CRA is taken seriously by market participants, unduly pressure the issuer into cooperating and, in the end, 78 Pinto (2006), at p. 344;Partnoy (2006), at p. 71; Möllers (2009) paying for the rating. 87 Taken to an extreme, CRAs may threaten issuers with unreasonably low ratings in order to motivate them towards solicited ratings.…”

Section: Unsolicited Ratingsmentioning

confidence: 99%

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Regulatory Evolution of the EU Credit Rating Agency Framework

Wittenberg

2015

Eur Bus Org Law Rev

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The recent financial crisis has triggered considerable concerns about the activities of credit rating agencies (CRAs), which has led to a shift away from selfregulation based on voluntary compliance with the IOSCO Code to the implementation of a regulatory framework at EU level under the supervision of the European Securities and Markets Authority. Against the background of the role CRAs play in the financial market system and how they have failed to fulfil their intermediary function, this paper examines the main weaknesses attributed to the operation of CRAs before and during the financial crisis and assesses the EU's regulatory response to these weaknesses. As the paper will elucidate, many of the major concerns identified have been addressed following consecutive regulatory amendments, albeit to differing degrees and levels of satisfaction, which in the future will require redress and further improvements to be implemented, including, but not limited to, the issuer-pays model, over-reliance on ratings, ratings shopping and private enforcement.

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Section: Credit Rating Agencies and The Financial Crisismentioning

confidence: 99%

“…34 ESME's Report 2008, supra n. 16, at p. 9. 35 Möllers (2009), at p. 478. Regulatory Evolution of the EU Credit Rating Agency… price in the case of default.…”

Section: Credit Rating Agencies and The Financial Crisismentioning

confidence: 99%

“…47 Darbellay and Partnoy (2012), at p. 4. 48 Möllers (2009), at p. 491. 49 Amtenbrink andDe Haan (2009), at p. 1921;Möllers (2009), at p. 479;Alexander (2014), at p. 304;, at p. 1085.…”

Section: Oligopolistic Structure Of the Rating Marketmentioning

confidence: 99%

“…62 Manns ( ), at pp. 1048Manns ( -1050Möllers (2009), at p. 482. See also Mathis et al (2009). reputable competitors exist to which market participants could divert their rating orders.…”

Section: Oligopolistic Structure Of the Rating Marketmentioning

confidence: 99%

Section: Unsolicited Ratingsmentioning

confidence: 99%

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Regulatory Evolution of the EU Credit Rating Agency Framework

Wittenberg

2015

Eur Bus Org Law Rev

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I. Reform or Revolution? The Financial Crisis, Eu Financial Markets Law, and the European Securities and Markets Authority

Moloney

2011

ICLQ

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Since the outset of the financial crisis, the EU financial markets regime1 has been undergoing a period of turbulence which contrasts sharply with the period of relative stability which it briefly enjoyed over 2005–2007 and post-FSAP (Financial Services Action Plan2). The FSAP reforms had been adopted. The Committee of European Securities Regulators (CESR) had emerged as an influential actor, driving some degree of supervisory coordination and co-operation and constructing a significant soft law ‘rule-book.’ And the 2007 Lamfalussy Review suggested broad political, institutional and stakeholder satisfaction with the Lamfalussy process. There was little enthusiasm for grand adventures in institutional design, albeit that supervision, an institutionally-driven concern, was presciently if belatedly emerging as a concern of the EU institutions. The Review's main concern, however, was with strengthening the pragmatic, if somewhat haphazard, network-based, ‘supervisory convergence’ model as the means for supervising the integrating EU financial market. With respect to regulation, reflecting the wider international zeitgeist pre-crisis,3 ‘Better Regulation’ and the need for a ‘regulatory pause’ were the watchwords of a Commission which, once the massive FSAP regime was safely in place, espoused the benefits of self-regulation and highlighted the risks of intervention without impact assessment, extensive consultation and evidence of market failure.4 This was most apparent with respect to credit rating agencies,5 debt market transparency,6 hedge funds,7 and clearing and settlement.8 Institutionally, a relatively sophisticated law-making apparatus, in the form of the Lamfalussy structures, a plethora of advisory bodies and stakeholder bodies (notably FIN-NET which represents the consumer and SME interest), had been established.

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Sources of Law in European Securities Regulation — Effective Regulation, Soft Law and Legal Taxonomy from Lamfalussy to de Larosière

Möllers

2010

Eur Bus Org Law Rev

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Regulating Credit Rating Agencies: the new US and EU law--important steps or much ado about nothing?

Cited by 7 publications

References 0 publications

Regulatory Evolution of the EU Credit Rating Agency Framework

Regulatory Evolution of the EU Credit Rating Agency Framework

I. Reform or Revolution? The Financial Crisis, Eu Financial Markets Law, and the European Securities and Markets Authority

Sources of Law in European Securities Regulation — Effective Regulation, Soft Law and Legal Taxonomy from Lamfalussy to de Larosière

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