Trésorier/Treasurer magazine - N°85 - April/May/June 2014 - (Page 12)

ONLINE FR/EN VERSION CORPORATE RATING CRITERIA REDESIGN LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°85 - APR / MAY / JUN 2014 Looking for someone to blame 12 The rating agencies have come under heavy criticism (wrongly, for sure), during the financial crisis. Everyone is looking for someone, or several people, to blame. Some people see the ratings agencies as bearing the main responsibility for the financial ills that beset us. The regulators and other supervisors have decided, amongst other measures, to reconsider how best to supervise and regulate the rating agencies. The European Commission has issued a number of proposals for the better supervision of finance as a whole, and rating agencies in particular. The EU is planning to redefine supervision directly by means of new directives and proposed regulations that are more specific, as seen recently in the proposals for the reform of money market fund regulations. The European commission wants not only to lay down how the rating agencies should work, reduce their dependency or excessive (in their view) use of rating agencies, but also to increase competition between the rating agencies to restrict the «Big Three's» oligopoly. This is an ambitious project, but one not without value, driven by political considerations and the wish to show that over five years after the Lehman Brothers disaster the European Commissioner, Michel Barnier, plans to regulate them more strictly. Politicians have the duty and the need to be able to impose penalties for, and insofar as possible to avert, any possible systemic risk. We may well think it sad that has taken over five years to legislate. Surely the pressure of public opinion is on the wane? Have they done their job? Plenty of people think not. The problems, however, arose from a total and blind dependence on and belief in just the opinions issued by specialists. These ratings were often taken as gospel and as unquestioned dogma, which they never claimed to be. A radical rethink When we come under severe criticism, often out of all proportion, it can be helpful and positive to carry out a rootand-branch review and rethink our own basic assumptions and working methods. A code of conduct has been developed under the impetus and on the initiative of corporate treasurers, which has largely been adopted by IOSCO. The fact remains that demonstrating greater transparency can only ever be helpful and can never be bad. Having come under fire, the rating agencies were able to respond and disarm criticism while at the same time demonstrating that they were also working to make the planet's financial system more robust and credible. We can only applaud all the work done on improving the information delivered to investors and on bolstering their own credibility. Furthermore, you sometimes have to change things to demonstrate that you have tried to prevent any further systemic risk and any misinterpretation. Talking strategically, anticipating regulations by taking action before they impose requirements on you, trying to be squeaky clean or putting your own house in order is no bad idea, as the old adage would suggest. Being proactive and not waiting for a European Commissioner to make you adhere to a new operating charter is, in my view, a clever response given a certain inertia on the part of the regulators. Reviewing your principles and working methods is a positive and healthy sign that is only to be encouraged. New design of credit rating criteria for non-financial companies Non-financial companies (corporates) and their treasurers think that in general it is unfortunate that some measures intended to prevent systemic risk, for which the banks are to blame, will be applied to them. Nobody can dispute the need for better regulation, particularly the need for checks and penalties on any misdeeds perpetrated by financial institutions that could put the whole system at risk. What treasurers are criticising, through EACT in their lobbying activities, is the tendency to cast the net too wide and to have the measures catch even those who were not responsible for the crisis. EACT has always advocated appropriate measures, and recommended that consideration be given to making exceptions where necessary (for example the collateral exemption under EMIR). We may applaud the initiative by S&P (Standard

Table des matières de la publication Trésorier/Treasurer magazine - N°85 - April/May/June 2014

INTERVIEW L’impact du nouveau référenteil COSO sur les trésoriers

Trésorier/Treasurer magazine - N°85 - April/May/June 2014