There is need to regulate all derivatives markets in interest rate, credit and forex products from a systemic perspective – the concept of “market regulation” as practiced by many emerging countries may perhaps not be so anachronistic. 35. The regime for credit rating agencies is another such area.
In spite of the systemic risk inherent to ratings, current efforts to regulate rating agencies focus mainly on microprudential issues and typically aim at reducing conflicts of interest and cliff effects by lowering use in regulatory and supervisory framework.