Credit Rating Agencies and European Financial Market Supervision

Credit rating agencies have been a core concern in the reform of the global and European financial architecture prompted by the financial crisis. The European Regulation on Credit Rating Agencies (CRA Regulation) entered into force at the end of 2009. Activities of credit rating agencies and the issuance of ratings had previously not been regulated in most Member States of the European Union. The importance of rating activities in financial markets and their regulation is not disputed. The previous reluctance of legislators - national and European - to regulate and supervise the rating sector is difficult to justify. This became even clearer with the financial crisis and with the assessment of its causes. The supervision of credit rating agencies became a pressing issue with the CRA Regulation. The European Commission piloted, in parallel, a fundamental overhaul of financial supervision in Europe aiming at a more efficient, integrated and sustainable European system of supervision. The legal acts introducing the new European financial supervisory architecture build on the 2009 Report of the High Level Group of Experts (the de Laroisière report) and came into force, recently. The new European system of supervision paved the way for making progress with a first reform of the CRA Regulation introducing a single European supervisory authority for credit rating agencies in the European Union. We take stock of the regulatory regime for credit rating agencies in its second year of application, and its - politically agreed - first reform