FRANKFURT (MNI) – Market participants should rely less on rating
agencies, and instead should increase their own direct monitoring of
developments to gain an accurate measure of a counterparty’s
creditworthiness, the European Central Bank said Monday.

“In the recent crisis, rating agencies did not prove to be a
satisfactory source of information upon which to assess and react to a
potential default, e.g. with regard to the downgrading of a financial
institution,” the ECB said in a report on the lessons learned during the
financial crisis.

“The exclusive reliance on rating agencies is not recommended as,
despite the enhancement of the respective European regulatory framework
24, agencies may change the rating of a critical counterparty’s
creditworthiness too late.”

— Frankfurt Bureau: +49-69-720 142; email:

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