Financial markets

‘Scathing’ report on credit rating agencies

Published on 3 December 2013 at 15:11

Leaking the results of a country evaluation to a third party before the official announcement demonstrates a conflict of interests and poor personnel management, according a report, released on December 2 by the European Securities and Markets Authority (ESMA) about the agencies responsible for evaluating a country's ability to pay back its debts, says Swiss daily Le Temps.

According to the report, which the paper describes as "scathing," the strict rules issued on June 20 by the European Union have not been applied by the major players in the ratings sector.

In a leader article, Spanish daily El Pais says that the ratings agencies were awarded "failing marks" by ESMA. "One of the irregularities that must be stressed is the direct influence of the CEOs of these rating firms who prevented their analysts from exercising the required independence," the paper says, concluding –

We can only hope that this will not be the only [critical report]. There is a need for the disappearance of the oligopoly that dominates this activity thus allowing other agencies access to this market.

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