The European Commisison Tuesday announced that as of Thursday, 20 June, credit rating agencies will have to follow stricter rules which will make them more accountable for their actions.
Credit rating agencies will have to be more transparent when rating sovereign states, Michel Barnier, EU Commissioner for Internal Market and Services, said in a statement.
"The new rules will also contribute to increased competition in the ratings industry currently dominated by a few market players and will reduce the over-reliance on ratings by financial market participants.
This is an important step towards restoring financial stability and trust in financial institutions and will help to avoid further crises," he added.
Credit rating agencies are major players in today's financial markets. Rating actions have a direct impact on the actions of investors, borrowers, issuers and governments.