14 Amendments of Sharon BOWLES related to 2010/2302(INI)
Amendment 11 #
Motion for a resolution
Recital D
Recital D
D. whereas CRAs rate three different sectors, the public sector, companies and structured finance instruments, and whereas CRAs played a significant role in the build-up to the financial crisis through the assignment of faulty ratings to structured finance instruments, which had to be downgraded on average three to four notchoptimistic ratings linked to US sub-prime mortgages and structured finance instruments, which then suffered multi-notch downgrades during the crisis,
Amendment 18 #
Motion for a resolution
Recital F
Recital F
F. whereas the industry's key problem is lack of competition, but noting that competition can also create conflict of interest, and the regulatory system's key problem is dependency on external credit ratings,
Amendment 32 #
Motion for a resolution
Recital I
Recital I
I. whereas the recent developments in the euro crisis have highlighted the significant role of sovereign debt ratings, and both inconsistency and pro-cyclicality in the regulatory use of ratings,
Amendment 35 #
Motion for a resolution
Recital I a (new)
Recital I a (new)
I a. Observes that independence of ratings from political manipulation is paramount in the context of economic governance and stress tests,
Amendment 59 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Expresses the view that market participants should not invest in structured or other products if they cannot assess the underlying credit risk themselves, or alternatively that they should apply the highest risk weighting;
Amendment 68 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Is aware of the inherent conflict of interest if market participants devise internal credit risk assessments for their own regulatory capital requirements, and hence sees the need to increase supervisors‘ capacity and resources for monitoring, assessing and overseeing the adequacy of the internal models; suggests that transparency of assumptions for independent academic assessment also has a role;
Amendment 71 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Highlights the global nature of the credit rating industry and urges the Commission and Member States to work on a global approach both in respect of CRA regulation and prudential and markets regulation referring to ratings in order to preserve a level playing field and prevent regulatory arbitrage while keeping markets open;
Amendment 78 #
Motion for a resolution
Paragraph 8 a (new)
Paragraph 8 a (new)
8 a. Stresses the importance that all rating agencies, whether funded privately or publicly, abide by the highest standards of integrity, disclosure, transparency of historical performance and conflict of interest management as set out in the CRA Regulation No 1060/2009;
Amendment 105 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Asks the Commission to conduct a detailed impact assessment and feasibility study on the establishment of an independent ECRaF and to come forward with legislative proposals; stresses that any legislative proposals to that effect need to be formulated with considerable care in order to avoid undermining the parallel policy initiatives of reducing over-reliance on ratings and encouraging new CRAs to enter the market;
Amendment 131 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Is of the opinion that the Commission should consider circumstances where it is appropriate for the use of two obligatory ratings for, such as innovative and complex structured finance instruments if an external credit rating is used for regulatory purposes;
Amendment 140 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Considers that the costs of both ratings should be borne by the issuer and that the first rating should be by a hired CRA, at the choice of the issuer, while the second should be assigned by the European Securities and Markets Authority (ESMA) to a different CRA on the baseis of meritspecific, defined and objective criteria, taking historic performance into account;
Amendment 145 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Is aware of the fact that market players are averse to volatile credit ratings because of the high costs involved (in related sell or buy decisions) when ratings are adjusted; considers, however, that smoothCRAs should have transparent criteria for assigning practices by CRAs makengs that balance accuracy and stability and take into account the fact that ratings moare likely to be procyclical and to lag behind financial market developmentpredictions derived inter alia from disclosures to the market, and thus, can lag market implied ratings;
Amendment 172 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. Supports the existence of various payment models in the industry as long as inherent conflicts of interest are addressed by appropriate transparency and regulatory means; asks the credit rating industry to come forward with proposals for alternative viable payment models that involve both issuers and users;
Amendment 179 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Considers that if credit ratings fulfil a regulatory purpose they should not be classified as mere opinions although it has to be recognised that ratings are predictions not fact, and that CRAs should be held accountable for the application of the methodology underlying their credit ratings; recommends therefore that CRAs‘ exposure to civil liability in the event of gross negligence be increaseddefined on an EU wide consistent basis and that provisions to that effect be anchored in Member States’ civil law;