Artificially increasing competition in the credit rating industry: the ESMA meets an immovable object

Research output: Contribution to journalArticle

Abstract

Recently, the European Securities and Markets Authority has aimed to reinvigorate its efforts to enforce the increase in competition within the credit rating industry. The Supervisory Provisions aim to explain, in precise detail, the rules and regulations for ‘Sectoral Competent Authorities’ with regards to enforcing the usage of rating agencies that have less than 10% of the European market share, particularly when an issuer issues structured-finance products that require two or more ratings. However, in this article we will look at the chances of this artificial push to increase competition actually working and see, through analysing the perspectives of market players, that the will of the regulator with regards to the credit rating industry is, unfortunately, irrelevant – only investors can affect the dominance of the ‘Big Three’ rating agencies.
Original languageEnglish
Pages (from-to)190-192
Number of pages3
JournalEuropean Company Law
Volume14
Issue number5
Publication statusPublished - 1 Sep 2017

Bibliographical note

Reprinted from European Company Law, vol 14, no. 5, 2017, pp. 190-192, with permission of Kluwer Law International.

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