DBRS Comments on EU Consultation Paper on Credit Rating Agencies

DBRS has commented on the EU Commission’s Consultation Paper, which puts forth policy ideas and possible future regulatory measures to strengthen the EU’s regulatory framework for credit rating agencies (CRAs).

The Consultation Paper indicates that some issues related to credit rating activities have not been addressed in the EU’s CRA Regulation, which came into effect on December 7, 2010.

DBRS has provided extensive commentary on all five areas of the Consultation Paper, including: Overreliance on External Credit Ratings; Sovereign Debt Ratings; Enhancing Competition in the Credit Rating Industry; Civil Liability of Credit Rating Agencies; and Potential Conflicts of Interest due to the “Issuer Pays” Model.

Though it is still early in the implementation of the EU CRA Regulation, DBRS believes these issues merit attention to ensure legislative and regulatory focus is properly placed.

DBRS’s comment letter to the EU Commission is available on www.dbrs.com under Regulatory Affairs.

DBRS has its headquarters in Toronto, with offices in New York, Chicago and London, and covers entities worldwide.