Regulators will intensify efforts to erode the oligopoly of dominant credit rating agencies (CRAs) motivated by the increasingly political roles they are taking in various fiscal debates, writes Oxford Analytica.
Recent decisions to downgrade sovereign debt are refocusing the EU and US regulatory spotlights on credit rating agencies.
In the United States, CRA-related rulemakings required under the US Dodd-Frank Act will continue, with final measures implemented throughout 2012. In the EU, strong UK opposition will likely thwart proposals to create a public CRA, but some further measures are likely, designed, at minimum, to increase competition and transparency, decrease the reliance of investors on ratings, and, perhaps, encourage formation of new agencies that would employ user-pays models.
For details, see CRAs oligopoly will face scrutiny