The USs often-criticised approach to credit rating agency (CRA) reform has been held up as an example for European regulators.
The Securities and Exchange Commissions encouragement of unsolicited ratings will be more effective than the European model which focuses on CRA responsibilities, according to London-based Clifford Chance partner Christopher Walsh who spoke at the American Securitisation Forums (ASF) annual conference on Monday January 23.
A more competitive market is what the US is looking for, whereas the Europeans, somewhat characteristic to form one would argue, has gone for regulatory control, Walsh said.
CRAs have historically been third party evaluators and strict regulation can create nervousness over the role they have to perform. My concern with the European legislation is that theyre now systematically being...