Iosco Suggests Ways to Reduce Reliance on Credit Ratings
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The International Organization of Securities Commissions advised regulators to encourage fund managers to make their own decisions about credit quality and to understand ratings companies’ methodologies as a means to reduce reliance on external grades.
The recommendations will be addressed to regulators, investment managers and investors, the Madrid-based association of more than 120 global regulators, said today in a statement. The report responds to a similar paper in 2010 from the Financial Stability Board that asked for specific policies to reduce the reliance on the rankings by banks, institutional investors and other market participants.