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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (97604)	1/16/2013 7:53:07 AM
From: Haim R. Branisteanu	Respond to of 218237

EU Parliament Approves Tightening Rules on Credit Rating Firms 16-Jan-2013 By Laurence Norman and Frances Robinson BRUSSELS--European parliamentarians Wednesday voted in favor of new rules that will restrict credit-rating firms' freedom to change sovereign-debt ratings and will make the organizations more vulnerable to lawsuits "These new rules go in the right direction... But we will need to make sure that the goals we have set are achieved," Leonardo Domenici, a socialist European Parliament lawmaker and lead negotiator of the legislation, said in a statement. "The new rules on sovereign debt will help prevent credit rating agencies interfering in the political agenda of the EU." The new rules will enable firms to do their own internal ratings, and that "these should provide viable, comparable and reliable alternatives to those of the rating oligopoly." At the heart of the new legislation are five changes: a push to discourage the automatic use of ratings by financial firms and EU institutions; efforts to relax the grip of the dominant ratings firms on the industry; restrictions on when ratings firms can change sovereign-bond ratings; a move to make it easier to bring lawsuits against firms for negligence; and an effort to prevent firms from rating bonds issued by companies that are significant shareholders. This will be the third set of European regulations for rating firms since the financial crisis erupted. The firms came under fire after credit markets seized up in 2007, as complex credit products that were given top-notch triple-A ratings later caused large losses for many U.S. and European banks. The three main ratings firms--Moody's Investors Service (MCO), Standard & Poor's Ratings Services and Fitch Ratings--also angered politicians with the timing of decisions to downgrade the ratings of many European sovereigns during the region's economic and debt crisis. European Union finance ministers are scheduled to sign off on the rules in coming weeks. Still, Green party lawmaker Sven Giegold said the legislation could have been more ambitious in preventing conflicts of interest, and that it had been "seriously downgraded" by member states.