The European Securities and Markets Authority (Esma) opened asurvey on the assessment of the capital strength of European banks by the three main rating agencies: Standard & Poor's, Moody's and Fitch. This was announced in an interview with the Financial Times by Steven Maijoor, president of the European market supervisory authority, explaining that the operations should close within the year.
“Bank ratings are very important due to their interaction with sovereign ratings and government bonds,” Maijoor stressed, adding that recent "mass downgrades" have raised questions about the "analytical resources" of the three agencies, who may not have “sufficient experience to cope with the additional work. A rating change for an entire block cannot be an excuse to spend less time on each individual institution. It is important that each bank receives the same level of attention in the analysis”.
Until last year the agencies did not follow any regulation in Europe, but since 2011 they are required to register with ESMA, which would have the power to suspend their activity or even revoke their licenses.
The latest bulk downgrades came from Mood's, which recently cut ratings early out of 15 global banks, Then 28 Spanish institutes. A few days earlier 18 banks also in the Iberian country had suffered the same treatment by Fitch.
