The European Securities and Markets Authority (ESMA) has published a report on the findings of its general investigation into the way credit rating agencies (CRAs) conduct surveillance of structured finance credit ratings.

During its investigation, ESMA identified shortcomings and weaknesses, as well as examples of good practices, in several areas affecting the surveillance of structured finance ratings for each CRA investigated.

Steven Maijoor, ESMA Chair, said:

“ESMA’s investigation has found shortcomings in CRA’s processes for the surveillance of structured finance credit ratings which could affect the quality of the ratings. These concerns centred on information quality controls, the application of CRAs’ methodologies and the related disclosure as well as the timely completion of the credit ratings annual review. Issues were also identified in relation to the role and independence of the internal review function.”

View Improvements needed in CRA’s surveillance of structured finance credit ratings, 16 December 2014