Public Enforcement and the Civil Liability Regime in the European Regulation of Credit Rating Agencies (CRAs): the Quest for Interplay

Abstract

The European regulation of credit rating agencies (CRAs) provides private and public enforcement rules in the event of agencies’ misconduct. Such rules can be either reviewed in isolation, as to their viability to achieve their respective objectives, or in combination. The latter perspective implies assessing the effective potential of the civil liability regime of CRAs to supplement the ESMA’s ability to impose sanctions against the agencies. Ever since its introduction, the civil liability regime has not been favourably received by the bulk of scholars and experts of the ratings industry. Accordingly, the supplementary strength of such a regime appears to be rather dubious. Better interplay between the two systems needs to be pursued. In this respect, a critical review of the mechanisms set out in the European regulation of CRAs, to spark public and private actions, offers valuable causes for reflection.