Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-06-15-Speech-2-450"
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"en.20100615.28.2-450"2
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"Mr President, Commissioner, the credit rating agencies were not able to anticipate the subprime mortgage crisis, the risk of structured financial products, or the collapse of Lehman Brothers.
A public European credit rating system should be established and a new role imposed on the existing European agencies, while new agencies should be promoted and the need for a global rating system following new principles should be considered.
These are the questions to which answers are needed, Commissioner.
The regulation adopted in April 2009 promotes their transparency, submits the agencies themselves to European supervision, and begins to deal with issues relating to their responsibility and quality, tackling some of the conflicts of interest in their operations; the Commission’s new proposal continues along these lines.
I am convinced that we in Parliament are going to contribute to the existence of supervision from 1 January 2011 and, furthermore, cooperate in supervision projects in order for there to be a stricter regulatory framework.
The role that the credit rating agencies are playing in the debt and public deficit crisis, revealing the discretional nature of the methods used for their ratings, how they are prepared and how they are communicated; the highly pro-cyclical impact of the ratings of agencies that have sometimes been described as pyromaniac firemen who stoke the fires even further; and their clash with the positions of the main international and European financial institutions to the extent that the European Central Bank has decided to disregard their ratings in sovereign debt transactions: all of these make it necessary to reconsider their role in a more in-depth way and match them up to the general interests.
Questions are now being openly raised as to whether the credit rating agencies are capable of making objective and responsible evaluations, in particular, of sovereign debt. The questions that are being asked are of a deeper nature – as you said, a structural nature – and affect their compatibility with democratic principles, because they have a bearing on the efforts that pensioners, workers and vulnerable parts of the population are making, and which they do not wish to see wasted and trampled on by irresponsibility in how the markets operate.
They are questions that affect independence. Are public credit rating agencies compatible with private ownership? Is it possible to be both judge and interested party? Is it possible to have a credit rating as a business model based on payments by the very actors who are to be examined? Can the actors themselves choose who examines them?
The United States Senate is already tackling these issues and we need to tackle them here too; they are issues that affect responsibility and sustainability.
Can responsible governance be ensured, that avoids short-term perspectives and ensures stability? Can the agencies remain indifferent to the commitments of the European authorities and the efforts of the main international public actors? Will they respond to the effects of the market, above all, of their consequences that could – as you have said – be classified as harmful? Will the privileges of regulation be maintained? Will the regulator be bound by the rules that call for their ratings to be used? Will there continue to be a lack of competition?
As far as legitimacy is concerned, can agencies maintain so much influence over our economies with such little control? Is it necessary to go beyond supervisory control and go to the internal control of the structure of governance itself, and even the structure of business itself?"@en1
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