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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

Chris Brummer

Georgetown University Law Center; The Institute of International Economic Law (IIEL); Atlantic Council; Milken Institute Center for Financial Markets

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, Chris 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

The 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/

Atlantic Council ( email )

1101 15th Street, NW
11th Floor
DC 20005
United States

HOME PAGE: http://chrisbrummer.com

Milken Institute Center for Financial Markets ( email )

1250 Fourth Street
Santa Monica, CA 90401
United States

HOME PAGE: http://chrisbrummer.org

Rachel Loko

Independent ( email )

No Address Available

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