28 Amendments of Gianni PITTELLA related to 2010/2302(INI)
Amendment 1 #
Motion for a resolution
Recital A
Recital A
A. whereas it welcomes the ongoing work at global, international and European level on the regulation of credit rating agencies (CRAs),
Amendment 3 #
Motion for a resolution
Recital B
Recital B
B. whereas CRAs are information intermediaries, reducing information asymmetries in the capital markets and facilitating global market access, reducing information costs and widening the potential pool of borrowers, thus providing liquidity to markets and helping find prices,
Amendment 16 #
Motion for a resolution
Recital E
Recital E
E. whereas Regulation No 1060/2009 was the first reaction to the financial crisis and already deals with the most pressing issues, subjecting CRAs to oversight and regulation; whereas, however, it does not address all the fundamental problems and, in fact, creates some new barriers to entry,
Amendment 26 #
Motion for a resolution
Recital F a (new)
Recital F a (new)
F a. whereas the best way to enhance competition would be to create a regulatory environment effective at promoting entry, and undertake a deeper analysis of the current barriers to entry and other factors affecting competition,
Amendment 39 #
Motion for a resolution
Recital I a (new)
Recital I a (new)
Amendment 40 #
Motion for a resolution
Recital I b (new)
Recital I b (new)
Ib. whereas recent regulation of ratings in the United States, with the Dodd Frank Act, has opted for less regulatory reliance on agencies’ judgments,
Amendment 45 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Considers that, in the light of the change in the naturuse of credit ratings, where the issuer is rated to get a preferential treatment under a regulatory framework rather than to gain access to the global capital markets, the over-reliance of the global financial regulatory system on credit ratings has to be reduced as far as possible and in a realistic timeframe;
Amendment 48 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Agrees with the principles set out by the Financial Stability Board in October 2010 giving general guidance on how to reduce reliance on external credit ratings, and welcomes the Commission's public consultation starting in November 2010; asks the Commission to review whether and how Member States use ratings for regulatory purposes in order to reduce the general over-reliance of the financial regulatory system;
Amendment 51 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Points to shortcomings in the standardised approach in the Basel II regulatory framework allowing regulatory capital requirements for financial institutions to be set on the basis of external credit ratings; supports increased use of the internal-ratings-based (IRB) approach, provided that the size and sophistication of the financial institution allow for an adequate risk assessment; cin order to ensure a level playing field it is important that internal models respect parameters prescribed in EU regulation and be subject to rigorous supervisory validation. Considers, at the same time, that smaller and less sophisticated players should be able to use external ratings, if no internal credit risk assessment is viable, provided that they fulfil appropriate due diligence requirements;
Amendment 62 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6a. Calls on the Commission to assess the possibility of replacing or combining reference to the rating with other instruments capable of performing a similar function;
Amendment 63 #
Motion for a resolution
Paragraph 6 b (new)
Paragraph 6 b (new)
6b. Considers it worthwhile, when seeking alternative indexes for use in measuring credit risk, to assess the possibility of using the difference between the interest rate on the issuer’s debt and the interest rate payable on an activity deemed risk- free;
Amendment 64 #
Motion for a resolution
Paragraph 6 c (new)
Paragraph 6 c (new)
6c. Stresses the desirability of combining overall ratings (indicated using letters of the alphabet) with more detailed probabilistic indications of the degree of probability of default and of the loss given default;
Amendment 69 #
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, powers and resources, for monitoring, assessing and overseeing the adequacy of the internal models;
Amendment 70 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7 a. In order effectively to exercise its supervisory powers, the European Supervisory Authority (European Securities and Markets Authority) should have the right to conduct unannounced investigations and on-site-inspections. When exercising its supervisory powers, the European Securities and Markets Authority should give the persons which are subject to proceedings an opportunity of being heard in order to respect their rights of defence;
Amendment 75 #
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 in order to preserve a level playing field, reduce over reliance and prevent regulatory arbitrage while keeping markets open;
Amendment 80 #
Motion for a resolution
Subheading 4
Subheading 4
Intermediate level: industry structure European Public Credit Rating FoundationAgency
Amendment 87 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Calls for a the establishment of a fullypublic and independent European Credit Rating Foundation (ECRaF)Agency which would expand its expertise into all three sectors of ratings;
Amendment 92 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Believes that the start-up financing costs to cover the first three years of the ECRaFuropean Credit Agency's work need to be carefully calculated; that these initial costs should take the form of a lump-sum capital payment and should be provided by the financial services industry with the involvement of both users and issuers; asks the Commission to produce a detailed impact assessment and cost estimate for the necessary financing in this respect; considers that the new ECRaF should be fully self-sufficient after the three-year start-up period;
Amendment 100 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Considers that, to ensure its credibility, the management, staff and governance structure of the new ECRaFuropean Credit Rating Agency need to be fully autonomousindependent vis-à-vis the Member States, the Commission and all other public bodies;
Amendment 106 #
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 public and independent ECRaFuropean Credit Rating Agency and to come forward with legislative proposals;
Amendment 121 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15 a. In order to reinforce competition between credit rating agencies, to help avoid possible conflicts of interest under the issuer-pays model, and to enhance transparency and the quality of ratings for structured finance instruments, asks that registered or certified credit rating agencies should be able to access information on structured finance instruments that are being rated by their appointed competitors in order to be in a position to provide unsolicited ratings.
Amendment 133 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. If an external credit rating continues to be used for regulatory purposes, is of the opinion that the Commission should consider the use of two obligatory ratings for structured finance instruments if an external credit rating is used for regulatory purposes, one of which should be derived from the European public rating agency;
Amendment 138 #
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 base of merit, taking historic performance into accountpublic credit rating agency;
Amendment 147 #
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 smoothing practices by CRAs make ratings more likely to be procyclical and to lag behindenhance financial market developments either upwards or downwards;
Amendment 152 #
Motion for a resolution
Paragraph 20 a (new)
Paragraph 20 a (new)
20 a. Calls the European Commission to entrust the European Court of Auditors, as an independent Institution, the rating on the sovereign debts;
Amendment 162 #
Motion for a resolution
Paragraph 21 a (new)
Paragraph 21 a (new)
21 a. Supports enhanced disclosure and explanation of methodologies, models and key rating assumptions adopted by credit rating agencies, also in light of the systemic impact that a downgrade on sovereign debt may produce;
Amendment 169 #
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 regulatory means; asks the credit rating industryEuropean Commission to come forward with proposals for alternative viable payment models that involve both issuers and users;
Amendment 188 #
Motion for a resolution
Paragraph 25 a (new)
Paragraph 25 a (new)
25a. Considers that an effective civil liability system for CRAs could stimulate innovation; notes that at present the system governing agencies’ liability is unclear;