The Governance of Credit Rating Agencies in the European Regulation: the Right Way to Enhance Market Competition?

Since 2007 financial markets worldwide have been suffering from a confidence crisis which has emphasised the discussion about the Credit Rating Agencies (CRAs) and the opportunity to enhance the competition in such a highly concentrated sector. The reform process, carried out by European and American regulators, aims at reinforcing the external surveillance on CRAs and, at the same time, improving the governance of the agencies in terms of board composition, internal control systems and disclosure. After an in-depth and comparative analysis of the legal rules, the article shows and discusses the results of an investigation focalised on the contents and quality of the disclosure of 32 selected CRAs, with the purpose of foreseeing the future competitive conditions in the European rating market, since the new European Regulation should break the oligopoly of the largest American agencies by introducing minimal governance requirements.