We [the regulators] have worked very hard, together with the industry, to identify the rules of conduct credit ratings agencies should respect in order to deliver a better judgment on the products they rate. This has produced the complementary part of the code of conduct IOSCO had published in 2004, which addresses the issue of structured-product ratings.
Having built this code of conduct, how do we make sure that it is implemented? I have always supported the view that we should have some kind of global monitoring, a bit similar to the kind we have for auditors, involving the main regulatory organisations at the global level. This is something IOSCO will contemplate at our next technical committee meeting this month.
Charlie McCreevy [European Commissioner for Internal Markets] and [French finance minister] Christine Lagarde have expressed the view that there should be some kind of registration of credit ratings agencies at the EU level. My proposal would be that we have a registration process at the EU level and the enforcement should be done at the level of national authorities.
The last point I want to mention is a very personal view and I haven’t yet seen people ready to contemplate it. Credit ratings agencies are, to my knowledge, the only financial profession that has no organisation of any kind. We have to talk to them bilaterally. I would advise that the agencies create some kind of organisation that would be able to talk both with them and the regulators. [For more on future regulation of the rating agencies, see "Over Rated?"]
How do you think Société Générale’s €4.9 billion rogue trading scandal in February has affected perceptions of the quality of corporate governance and financial regulation in France?
This serious accident has been dealt with extremely rapidly, without the involvement of the government or the authorities. The company has taken care of itself. It has built a market solution, which has been implemented efficiently. These events haven’t had severe consequences in the market from the point of view of confidence in this country. Of course, the event occurred owing to serious flaws in internal control.
The AMF recently had to deal with press leaks of an investigation into allegations of insider trading at EADS. Has that hurt confidence in the AMF?
Not at all. I’m undoubtedly worried about the fact that leaks got out. It’s always unpleasant, first and foremost, for the persons under investigation because we should never lose sight of the principle of the presumption of innocence and the principle of a fair trial.
Leaking information to the press is always detrimental when things are developing normally according to organised procedures and sound principles. So I’m very sorry about that. But now I’m calm about it. We did our job properly, we know the leaks didn’t come from us and we know the Enforcement Committee [a unit of the AMF] will analyse the facts, organise the contradictions with the people involved and hopefully make a decision within a year or so. I’m absolutely convinced that processes at the AMF are watertight.