The Investment Management Association in the UK has responded to the Treasury Select Committee's inquiry into credit ratings agencies, highlighting their independent role.
Criticising the regulation of credit ratings agencies, the trade body says in a statement that they must be allowed to “act free from political interference”.
“Actions to reduce reliance on credit ratings agencies make sense,” says Guy Sears, director of wholesale. “But the reality is they will remain an important part of the financial market infrastructure for years to come.”
Referring to the recent downgrade of several countries in Europe, Sears says ratings agencies have made responsible and sensible decisions.
“Their recent downgrading of European countries has reflected, not caused, underlying fiscal problems,” Sears says. “However, the agencies may be seen to hold disproportionate sway over global markets, not least because they are embedded in regulations such as Solvency II and CRD [Capital Requirements Directive] and in institutional client mandates.”
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