
CESR publishes responses to the rating of structure finance instruments
Daily news headlines
BRUSSELS – The Committee of European Securities Regulators (CESR) has published the first batch of responses to its questionnaire regarding the rating of structured finance instruments.
In its 2006 report, CESR identified a possible conflict of interest as an area of common deviation to all credit rating agencies (CRAs), due to the lack of a clear separation between the rating service and the ancillary services provided by CRAs.
CESR particularly highlighted the fact that this was even more troublesome in the “area of structured finance ratings, since the structures of the debt obligations are often decided in negotiations between the issuer and the CRA. These negotiations may contain several hypothetical structures, for instance, when it comes to how different tranches of debt are set up, or when it comes to levels of credit enhancement”.
To investigate this further, CESR decided to include a specific section on structured finance in its second annual report – part of the research for this included issuing a questionnaire to gather more information from the CRAs on these issues.
The two public responses can be accessed via CESR’s website: www.cesr-eu.org. The deadline for additional responses has been extended until September 10.
CESR has also scheduled a meeting with the CRAs for the beginning of October to discuss how they develop ratings for structured finance products. The association aims to seek clarification on the CRAs’ role in the US subprime mortgage crisis. It will also be meeting with Charlie McCreevy, European Commissioner for the Internal Market and Services, following his invitation to discuss CESR’s work on CRAs in the light of market developments in this field, and in particular, to discuss the role of CRAs in the rating of structured finance instruments.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on People
People: Finma CEO quits, Citi’s dealmaking promotion, and more
Latest job changes across the industry
People: Paco packs up at Citi, Credit Suisse exits continue, and more
Latest job changes across the industry
People: Wipf hands ARRC reins to Phelan, Tyce heads to Nomura, and more
Latest job changes across the industry
People: Barclays’ equity hires, CA’s CVA head departs, and more
Latest job changes across the industry
Asia moves: Senior hires at BNP Paribas, BNY Mellon and more
Latest job news from across the industry
Barclays retools inflation desk with two senior hires
UK bank raids Deutsche Bank and JP Morgan for new regional heads
Asia moves: Senior hires at Nomura, HKEX and more
Latest job news from across the industry
Asia moves: Senior hires at Citi, Nomura and more
Latest job news from across the industry