Thus, their role of providing to the investors an objective and independent assessment of the risks entailed in the securities rated by them, took a back seat while their primary loyalty lay with the issuers of securities. Moreover, the dual role of the rating agencies in structuring as well as rating of securities also created a conflict of interest in their functioning.
But, as I said, the governance and voting arrangements for the EBA clearly need to change. Another key point of discussion relates to the scope of the ECB’s responsibilities in terms of the number of banks it is responsible for, and the speed with which its new mandate is implemented.