Newsletter December 2013: Europe finds fault with sovereign ratings

PARIS – The European Securities and Markets Authority published a report in early December that claimed to have found “a number of deficiencies in the processes for producing and issuing sovereign ratings” at the three large credit ratings agencies (CRAs) Fitch, Moody’s and Standard & Poor’s. This followed a research period from February to October 2013, to address concerns about “potential conflicts of interests, the impact of sovereign ratings on other types of ratings, CRAs’ capacity to cope with the number of rating actions during a period of high volatility, the use of bulk rating actions, and issues around the confidentiality and timing of rating actions.”