Newsletter November 2010: Rating agencies face new EU round of regulation

BRUSSELS – The European Commission is preparing a new round of regulations for credit rating agencies (CRAs), with a public consultation focusing on a range of concerns arising out of the euro debt crisis. Some of these concerns are long-standing, troublesome issues, such as the lack of competition in the credit rating business, the absence of common civil liability law in Europe, and inherent conflicts of interest in the standard “issuer pays” model used by the three biggest agencies – Standard and Poor’s, Fitch Ratings, and Moody’s Investor Services.