CRA III and the over-reliance on rating in question
The question of how investors make their investment decisions, and to what extent they make mistakes based on an inaccurate reliance on credit rating, has been at the forefront of the regulator’s attention for a number of years.
The very simple issue can be put as follows: if you are an investor and have no personal view on, say, the future of the US Midwest mortgage market, is it reasonable to invest in a transaction — no matter how well rated it is — that is fully exposed to that market? The regulators — and others — believe that this is not the case and have taken a series of initiatives to lead investors to adopt a different approach.
Following similar types of initiatives in the US, the EU introduced the regulation of credit agencies back in 2009. This regime has already been modified once. In a third wave of regulation, Regulation (EU) No 462/2013, amending Regulation (EC) No 1060/2009 on credit rating agencies (CRA III), came into force on 20 June 2013 in order to supplement the existing regulatory framework for credit rating agencies (CRAs) within the EU…
If you are registered and logged in to the site, click on the link below to read the rest of the Allen & Overy briefing. If not, please register or sign in with your details below.
News from Allen & Overy
News from The Lawyer
Briefings from Allen & Overy
This year is expected to be a bumper year for pension risk transfer in the UK.
The OFAC has imposed a new set of ‘sectoral sanctions’ against two Russian energy firms and two Russian banks pursuant to Executive Order 13662.
Analysis from The Lawyer
At the time of its launch Accutrainee was described as a revolutionary change to the training model. Has it proved to be so? Not really.
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.