Tackling Transparency: ESMA Eyes Ratings Opacity

ESMA plans to more closely supervise rating agencies' pricing policies, in response to what user firms say is a lack of transparency.

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Pan-European regulator the European Securities and Markets Authority (ESMA) is currently developing a strategy for increased supervision of credit rating agencies (CRAs), in response to complaints from market participants of unreasonable price rises and a lack of transparency around the CRAs’ pricing models. Prior to the financial crisis, rating agencies were encouraged to follow the International Organization of Securities Commissions (Iosco) guidelines, a global set of standards. After the