Document details

  • Reference2013/1775
  • Publication Date02/12/2013
  • Creation Date02/12/2013
  • TypeReport
  • SectionsCredit Rating Agencies


This report summarises the findings of the European Securities and Markets Authority’s (ESMA) general investigation into sovereign credit ratings issued by Fitch Ratings, Moody’s Investors Service and Standard & Poor’s which took place between February and October 2013, as indicated in its Credit Rating Agencies (CRAs) 2013 Supervision and Policy Work Plan.

In this report ESMA describes the observed deficiencies and main concerns while also identifying a number of good practices in the following areas:

• the role of senior management and other non-rating functions in the rating process and the actual or potential conflicts of interest which could arise;

• the actual or potential conflicts of interests generated by the involvement of sovereign analysts in research and publication activities;

• confidentiality of sovereign rating information and controls in place prior to publication of ratings (including IT and access controls to confidential information);

• timing of publication of sovereign ratings, including timely disclosure of rating changes;

• monitoring of the adequacy and expertise of resources dedicated to sovereign ratings;

• preparation of rating committees; and

• definitions of roles and responsibilities among different analytical functions.

ESMA’s investigation revealed shortcomings in the sovereign ratings process which could pose risks to the quality, independence and integrity of the ratings and of the rating process. As of the date of this document, ESMA has not determined whether any of the observations made in this report constitute serious indications of the possible existence of facts liable to constitute one or more infringements of the CRA Regulation.