EU failing to encourage more competition for Big Three rating agencies

EU attempts to inject more competition into credit ratings still have a long way to go as the bloc’s latest market share figures confirm the growing dominance of the Big Three agencies.
EU failing to encourage more competition for Big Three rating agencies

Standard & Poor’s has a market share of 40.42% in the 28-country bloc, followed by Moody’s Group, with 34.67%.

Fitch is third, with 16.8%, figures from the EU’s European Securities and Markets Authority showed yesterday.

Combined, the Big Three make up 92% of the market, with the nearest rival, DBRS Ratings Limited, with a market shares of 1.47%.

A year ago, the Big Three had a market share of around 90%.

ESMA is the regulator for ratings agencies in the EU and it is required to calculate market shares on a regular basis to see if the objectives of the bloc’s rules are being met.

Under the rules, where an issuer intends to use two or more agencies, they should consider using one with less than a 10% market share or explain why not.

Policy maker hopes for a European ratings agency with a large market share have been continually dashed despite three sets of EU regulation since the 2007-09 financial crisis.

Some countries across Europe had complained about the perceived power of the ratings firms.

The NTMA here had in the past expressed its impatience with Moody’s rating for Ireland during the bailout years.

Reuters and Irish Examiner staff

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