Professional negligence claims to increase against credit rating agencies?

Published on 8 Jun 2010 under category: legal

Credit rating agencies should be subject to more intense regulation because of their influence on the market, claims one industry expert.

Firms could see an increase in professional negligence claims, if they make poor assessments of markets.

The EU Commission has proposed new rules that will oversee the reporting and decision-making practices of such agencies.

Industry commentators have welcomed the moves to increase supervision in the sector.

Martin Bamford, chartered financial planner for Informed Choice, said: "The opinions of credit ratings agencies can have a big impact on markets and economies, so better regulation of these bodies is needed."

He added that the same firms called in to assess European companies had failed to stop the Lehman Brothers crash.

"They have failed in the past and will probably fail in the future to accurately judge what is happening in a timely fashion."

However, he also claimed that firms should remain independent.

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