The New Politics of Transatlantic Credit Rating Agency Regulation

The Fate of Transnational Financial Regulation, Routledge 2013, Tony Porter, ed., Forthcoming

23 Pages Posted: 21 Nov 2012 Last revised: 27 Feb 2014

See all articles by Chris Brummer

Chris Brummer

Georgetown University Law Center; Institute of International Economic Law (IIEL)

Rachel Loko

Independent

Date Written: November 21, 2012

Abstract

In the years immediately leading up to the global financial crisis, and shortly thereafter, scholars envisaged a possible “convergence” of rules relating to the cross-border regulation of credit rating agencies (CRAs). This paper argues, however, that any full harmonization of approaches will be difficult due to varying political and economic realities motivating CRA regulation on both sides of the Atlantic. To demonstrate, this Article traces the regulation of CRAs from the early 1900s in the United States through today’s European debt crisis. It shows that Europe’s incentives to regulate CRAs have grown as its economy has shifted from bank to capital market finance, as globalization internationalized the consequences of what was weak CRA governance in the United States, and as CRA ratings of sovereign debt have come to more directly impact EU officials’ ability to manage responses to the Eurozone crisis. In the wake of these developments, European regulators are poised to adopt measures that may move beyond not only U.S. approaches, but also the consensus expressed in G-20 declarations and the IOSCO Code of Conduct.

Keywords: credit rating agencies, SEC, EU, IOSCO, CRA 1, 2 and 3, Dodd-Frank

Suggested Citation

Brummer, Christopher J. and Loko, Rachel, The New Politics of Transatlantic Credit Rating Agency Regulation (November 21, 2012). The Fate of Transnational Financial Regulation, Routledge 2013, Tony Porter, ed., Forthcoming, Available at SSRN: https://ssrn.com/abstract=2179239

Christopher J. Brummer (Contact Author)

Georgetown University Law Center ( email )

Washington, DC 20057
United States

HOME PAGE: http://www.law.georgetown.edu/faculty/brummer-chris.cfm

Institute of International Economic Law (IIEL) ( email )

Georgetown University Law Center
600 New Jersey Avenue, NW
Washington, DC 20001
United States

HOME PAGE: http://iielaw.org/member/chris-brummer-2/

Rachel Loko

Independent ( email )

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