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To ask Her Majesty's Government, further to the remarks by Lord Sassoon on 15 November (Official Report, col. 676), what steps they have taken to foster competition in the provision of credit ratings in the United Kingdom; and whether they have made representations to the European Commission to refer credit ratings agencies to European competition authorities.
As reflected in the Government's response to the European Commission's consultation document1, we have taken a pro-competitive stance in discussions on the development of credit rating agency regulation. As further explained in the spoken and written evidence provided to the House of Lords inquiry on sovereign debt, the Government take the view that efforts to reduce overreliance on credit rating agencies (CRA) ratings, increases in transparency and effective implementation of the registration system in Europe will reduce barriers to entry in the industry and foster competition.
The Government and the Bank of England have been involved in the Financial Stability Board's ongoing work on reducing overreliance on CRA ratings. Previous CRA legislation agreed after the crisis (CRA1 and CRA2) has also encouraged competition. This is illustrated by 12 agencies other than the main three incumbents already having been registered in Europe. The final list is available at: http://www.esma.europa.eu/popup2.php? id=7692.
The relevant competent competition authority in Europe is the European Commission, which released its latest set of legislative proposals on CRAs on