LONDON, July 2 (Reuters) – The European markets watchdog is
investigating whether the big three credit ratings agencies’
methods of evaluating banks are rigorous and transparent enough,
its chairman Steven Maijoor told the Financial Times on Monday.
The European Securities and Markets Authority (Esma) is
inspecting Standard & Poor’s (S&P;), Fitch and Moody’s Investors
Service, and it expects to finish by the end of the year, the
newspaper said.
Maijoor said mass downgrades, such as Moody’s change of
stance on 15 global banks last month, “raised concerns about
whether there are sufficient analytical resources” at the
ratings agencies.
He told the newspaper that Esma was not attempting to
influence the ratings but was only asking that the agencies’
choices made economic sense and were logical.
S&P; told the FT that it was looking forward to explaining
the steps it had taken to “maximise the transparency, quality
and consistency” of its bank ratings. The other two agencies
declined to comment to the newspaper.
The ratings firms must register and remain in good standing
with the regulator to operate in Europe although the agency has
never taken an enforcement action since its founding two years
ago.
