EU Warns Credit Rating Agencies

The European Union’s securities market regulator indicated it discovered some shortcomings in how the major rating agencies assess risk to sovereign debt.

The European Securities and Markets Authority (ESMA) said its investigations into Fitch, Moody’s and Standard & Poor’s revealed issues in the sovereign rating processes.

Big three could be fined

In its report, the ESMA pointed out its investigation revealed shortcomings in the sovereign ratings process which could pose risks to the quality, independence and integrity of the ratings and of the rating process. The work was carried out before new European Union regulations...