Local view for "http://purl.org/linkedpolitics/eu/plenary/2004-02-09-Speech-1-053"
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"en.20040209.4.1-053"2
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"Mr President, Commissioner, ladies and gentlemen, and Mr Katiforis, whom, for a start, I warmly thank for the report on the future assessment of rating agencies.
What is this actually about? It is a fact that rating agencies have, in the capital market, a very great deal of power and influence over enterprises. Upgrading or – in particular – downgrading is significant for an enterprise, in that it makes for major problems with the raising of capital, financial problems, and that does of course have indirect effects on jobs. Rating agencies, though, also assess countries; in Germany, for example, they assess the Federal states. It follows that the upgrading and downgrading of German federal states has effects on the taxpayer. I am not making this point by way of criticism, but only as an observation. There are three rating agencies in the market; even though I am a defender of competition and would very much welcome it if they were to be joined by more, I think that an administrative, public solution would be the wrong one. If anything, the creation of any more rating agencies, or at any rate, of a European one, should be in response to the market, but all attempts to do so to date have been unsuccessful.
If we take into account the power that the rating agencies have, and our tendency, in legislating on financial markets, towards ever more regulation and supervision, then we have to give some thought to how we are to handle them in future. It is for this reason that I regard Mr Katiforis’ report as very important, in that it is the first in Europe to give attention to this topic. It is also important that Europe should do so. I would describe all three of the existing rating agencies as being predominantly Anglo-Saxon. Not that there is anything intrinsically wrong with that; but there are, after all, different financial structures within the European Union and around the world, with different rules, and not every rule that works on one side of the Atlantic must likewise be applicable
on the other. That is why I see it as highly significant that we should make the attempt at the European level. In so doing, we should not give so much attention to what the Americans are doing in this field, for – after all – rating agencies also want to do business in this part of the world.
All this we have to consider in the context of Basel II, in which rating – whether internal or external – will increasingly apply in the financing of small and medium-sized enterprises. It will become normal, and the quintessential difference between external and internal rating will be that internal rating will, in the Member States, be subject to financial supervision, whereas external rating will not. What is at issue is whether we can carry on in future with only internal rating being supervised, while external rating is not. My main reason for raising this point is that I am told, by people in industry and in the financial sector, that businesses themselves find it very difficult to get the relevant information about their own rating, so one can scarcely speak in terms of a normal customer relationship between enterprises and rating firms.
This makes it important that we should now demand that the Commission should analyse this issue, do some work on it, say precisely how things currently stand, and make proposals. That is why I very largely share Mr Katiforis’ concerns. The outcome should, however, be left open; we should not already be calling for registration and supervision, which can be left to the end of the process. We can, though, aim to get the rating agencies to give an undertaking, which would include a commitment to transparency, and which the Commission should take as a basis for its work. This process could well involve the rating agencies making their own proposals. I regard it as a matter of urgency – as does the Group of the European People’s Party (Christian Democrats) and European Democrats – that we should get this process underway now, that we should monitor it with a critical eye, and that the Commission should submit its proposals in the middle of next year."@en1
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