15 Mar 2012

AFME comment on ESMA endorsement of credit ratings issued by ratings agencies in US, Canada, Hong Kong and Singapore

Commenting on today’s announcement by the European Securities and Markets Authority (ESMA) that credit rating agency regulation in US, Canada, Hong Kong and Singapore is in line with European rules, Mark Bearman, a director at the Association for Financial Markets in Europe (AFME) said:

“ESMA’s announcement should allow firms to continue to use ratings from these major jurisdictions, thereby avoiding the potential for multiple increases in regulatory capital requirements. The inability of banks to use ratings from these third-country jurisdictions could also have led to increased concentration risks, unintended consequences for the management of liquidity and the non-viability of some business models, so this is good news for the industry and alleviates much of the impending market disruption. 

“Similar announcements in relation to the ability to use ratings from Mexico, Brazil and Argentina would be welcome ahead of the end-April deadline.”

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