The European Union's markets watchdog said its examination of the "Big Three" ratings agencies found several shortcomings including a lack of adequate transparency and set out areas for improvement. "The European Securities and Markets Authority has not determined whether any of the observations in the report constitute a breach of the Credit Rating Agency Regulation," ESMA said in a statement.
"ESMA will follow-up on the observations through risk mitigation plans for each individual CRA in the first half of 2012," it added. The Paris-based watchdog, which became the main supervisor for ratings agencies in the EU last year, examined the "Big Three" agencies: Standard & Poor's, Moody's and Fitch. ESMA listed several areas for improvement, including transparency of rating methodologies, disclosure of ratings; and recording of core internal processes and decisions.