(June 8, 2010) On June 2, 2010, the European Commission, in an effort to improve transparency and to ensure closer supervision and control of the functioning of credit-rating agencies at the European Union level, unveiled its plans to amend the existing EU rules on such institutions. (Andrew Willis, Brussels Sets Out Plans to Regulate Credit Rating Agencies, EU OBSERVER, June 3, 2010, available at http://euobserver.com/9/30199/?rk=1.) Credit-rating agencies have been a recent subject of criticism in Europe, especially because of their role in exacerbating the euro crisis. The American-based credit agency Standard & Poor's has been linked to downgrading Greek bonds in April 2010, ultimately resulting in Greece's need to seek financial assistance. (Id.)
Among the highlights of the proposed new rules is the creation of a new agency, the European Securities and Markets Authority (ESMA), to supervise the credit-rating agencies. If the European Council and the European Parliament reach an agreement to establish the ESMA, the new body would assume the supervision over credit-rating agencies that is currently undertaken by national authorities. The agencies would also be required to register with the ESMA. (Id.)
Germany and France, in particular, have been urging greater oversight of the credit-rating agencies. A proposal by France for the creation of an “economic government” of the 16 EU Members who have joined the euro failed to garner the support of other Members and the President of the European Commission, Jose Manuel Barroso.
President Barroso, in announcing the Commission's proposals on credit-rating agencies, supported the idea of a tax on financial transactions, but he has acknowledged the difficulty of such a measure's gaining universal support. The United States has expressed its disapproval of this idea. (Id.)