Enhanced international monitoring and co-operation over credit rating agencies needed says Iosco
MADRID – The International Organisation of Securities Commissions (Iosco) has called for greater international co-ordination in the oversight of credit rating agencies. The call comes after the US Securities and Exchange Commission introduced new rules for credit rating agencies and the European Union drafted a directive for rating agency regulation. European regulators have so far dismissed Iosco’s attempts at industry self-regulation.
The industry body’s technical committee has completed its assessment of methods for checking compliance with Iosco’s voluntary code of conduct released in May 2008. Iosco identifies four measures to improve international monitoring of the credit ratings process, which has been the subject of ongoing controversy since ratings of subprime structured credit became volatile last year, exposing the shortcomings and conflicts of interest within the industry.
The first recommendation is for a global consistency in regulation. The second is for Iosco’s Task Force on Credit Rating Agencies (TFCRA) to explore monitoring solutions while legislative measures continue. The third is for the TFCRA to review the rating agencies’ compliance with the code of conduct, reporting back in January 2009. Lastly, the fourth is for the TFCRA to explore the possibilities of developing an international monitoring body for the industry to satisfy the demands of regulators in response to market events.
More on Operational Risk
Didn’t take BBA inquiries into lowballing too seriously
Accused Libor rigger faced hurdles influencing Citi submitters
OpRisk Top 100 list sees losses reduce by 27%
Bank relied on BBA and on-the-job training, fraud trial told
Sign up for Risk.net email alerts
Sponsored video: Elseware
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
Watch highlights of this year's London conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.