23 Amendments of Burkhard BALZ related to 2010/2302(INI)
Amendment 4 #
Motion for a resolution
Recital B
Recital B
B. whereas CRAs are supposed to be information intermediaries, reducing information asymmetries in the capital markets and facilitating global market access, reducing information costs and widening the potential pool of borrowers, thus providing liquidity to markets and helping find prices,
Amendment 8 #
Motion for a resolution
Recital C
Recital C
C. whereas, inbacked by recent legislation, CRAs have been assigned another role which can be classified as one of ‘certification’, reflecting the fact that ratings are increasingly embedded in regulatory capital requirements,
Amendment 22 #
Motion for a resolution
Recital F
Recital F
F. whereas the industry'’s key problem is lack of competition and methodical transparency and the regulatory system'’s key problem is dependency on external credit ratings,
Amendment 28 #
Motion for a resolution
Recital G
Recital G
G. whereas, in good times, smaller and less sophisticated market participants tend to mistake or disregard the underlying methodology and meaning of credit ratings, which seek to pin down the probability of default,
Amendment 29 #
Motion for a resolution
Recital H
Recital H
Amendment 33 #
Motion for a resolution
Recital I
Recital I
I. whereas the recent developments in the euro crisis have highlighted the significant role of sovereign debt ratings, where the CRAs' performance did not always convince and where the decisions of CRAs were not always fully comprehensible,
Amendment 44 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Considers that, in the light of the change in the naturpurpose of credit ratings, where the issuer is rated to get a preferential treatment under a regulatory framework rather than to gain access to the global capital markets, the over-reliance of the global financial regulatory system on external credit ratings has to be reduced as far as possible and in a realistic timeframe;
Amendment 52 #
Motion for a resolution
Paragraph 3 a (new)
Paragraph 3 a (new)
3 a. Points out that this should be considered as well in the current discussions on Basel III and its implementation by CRD IV;
Amendment 56 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Sees the need to restore investors‘’ ability to conduct their own due diligence as a pre-requisite for enabling increased use of proprietary internal models for credit risk assessment; suggests that an incentive be created for banks and other financial players to conductshould use proper internal risk assessments much more often;
Amendment 58 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Expresses the view that professional and larger and more sophisticated market participants should not invest in structured products if they cannot assess the underlying credit risk themselves, or alternatively that they should apply the highest risk weighting;
Amendment 76 #
Motion for a resolution
Paragraph 8 a (new)
Paragraph 8 a (new)
8 a. Regards the stimulation of competition, the promotion of transparency and the question of a future pay model as the most important tasks while the question of the origin of a CRA should be secondary;
Amendment 77 #
Motion for a resolution
Paragraph 8 b (new)
Paragraph 8 b (new)
8 b. But stresses at the same time that more competition does not automatically imply better competition but needs to be combined with strong requirements assuring the quality of the rating to avoid phenomenon like "rating shopping";
Amendment 83 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Calls for aAsks the Commission to conduct a detailed impact assessment and feasibility study on the establishment of a fullyn independent European Credit Rating Foundation (ECRaF) which would expand its expertise into all three sectors of ratings;
Amendment 94 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Believes that the start-up financing costs to cover the first three to five years of the ECRaF'’s work need to be carefully calculated; that these initial costs should take the form of a lump-sum capital payment and should be provided by the financial services industry with the involvement of both users and issuers; asks the Commission to produce a detailed impact assessment and cost estimate for the necessary financing in this respect; considers that the new ECRaF should be fully self-sufficient after the three-year start-up period;
Amendment 103 #
Motion for a resolution
Paragraph 12
Paragraph 12
Amendment 117 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Points out that, in order to enable investors adequately to assess risk and to fulfil their due-diligence and fiduciary duties, increased disclosure of information about products is necessary in the field of structured finance instruments to allow investors to make informed judgments; considers that sophisticated investors should be able to rate the underlying credits from which they can then derive the risk of a securitised product;
Amendment 124 #
Motion for a resolution
Paragraph 17
Paragraph 17
Amendment 141 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. Considers that the costs of both ratings should be borne by the issuer and that the first rating should be by a hired CRA, at the choice of the issuer, while the second should be assigned by the European Securities and Markets Authority (ESMA) to a different CRA on the base of merit, taking historic performance into account, but supporting the establishment of new CRAs;
Amendment 142 #
Motion for a resolution
Paragraph 19 a (new)
Paragraph 19 a (new)
19 a. Points out that reputation can not be imposed by a regulator, but that every new CRA will only become accepted if it gains credibility;
Amendment 146 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Is aware of the fact that market players are averse to volatile credit ratings because of the high costs involved (in related sell or buy decisions) when ratings are adjusted; considers, however, that smoothing practices by CRAs make ratings more likelythus ratings tend to be procyclical and to lag behind financial market developments;
Amendment 158 #
Motion for a resolution
Paragraph 21 a (new)
Paragraph 21 a (new)
21 a. Believes that given the effects that credit ratings of sovereign debt can have on the market, transparency about the methods and the reasons for decisions as well as liability of CRAs need to be improved in this field;
Amendment 181 #
Motion for a resolution
Paragraph 23
Paragraph 23
23. Considers that if credit ratings fulfil a regulatory purpose or are done on sovereign debt they should not be classified as mere opinions, and that CRAs should be held accountable for their credit ratings; recommends therefore that CRAs‘’ exposure to civil liability in the event of gross negligence be increased and that provisions to that effect be anchored in Member States’ civil law;
Amendment 186 #
Motion for a resolution
Paragraph 25
Paragraph 25
25. Suggests that each registered CRA should conduct an annual review to assess its past credit rating performance and should compile this information in an accountability report for the supervisor; suggests that the ESMA should carry out random checks on accountability reports to ensure a high quality standard in credit ratings;