Cesr: CRAs show room for improvement

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PARIS - As a follow-up to the Group of Twenty conclusions of November 2008 and those of the European Commission in its communication on credit rating agencies (CRAs), the Committee of European Securities Regulators (Cesr) was tasked to report to the EC and the Economic and Financial Committee of the European Union on the progress made by EU-based CRAs towards compliance with the revised International Organisation of Securities Commission's (Iosco) Code of Conduct published in May 2008. Cesr concludes CRAs have been broadly compliant with the Iosco standards but that there is room for substantial improvements.

Cesr notes the agencies have updated their codes of conduct to take into account most, but not all, of the revisions made to the Iosco code, in particular with respect to structured finance products. But it also observes there are a number of provisions on which CRAs deviate from the Iosco code and therefore believes room for improvement exists.

Full details on the Iosco code provisions from which the CRAs deviate, either individually or collectively, are included in the main body of Cesr's report, which can be downloaded here.