Credit Rating Agencies have come under the regulatory spotlight since overvaluing sub-prime mortgages in the US which triggered the collapse of the housing market and the 2007 financial crisis. More recently they have come in for criticism by exacerbating the debt problems of certain European countries by further undermining their ability to raise funds.

Wolf Klinz (FDP, Germany), ALDE spokesperson on the legislation and chairman of Parliament's Special committee examining the causes and consequences of the financial crisis believes that stronger EU supervision of the operations of these agencies is of paramount importance:

"Today's package of proposals for strengthening EU-wide supervision of financial markets and corporate governance is a key plank in the response to the economic and financial crisis."

"Credit Rating Agencies in particular have lacked transparency and scrutiny. The effective monopoly of three global ratings agencies has stifled competition whilst their sources of financial backing raise substantial concerns over conflicts of interests.

"Furthermore, the pro-cyclical way in which they intervene in financial markets is counterproductive to stabilising the macroeconomic climate they are influencing, as we have seen in the recent cases of Greece, Portugal and Spain. Much of their activity is thus self-serving and self-fulfilling."

"The present amending regulation should tighten supervision and ensure a more coherent overview of their operations across the EU, increasing transparency for investors and other users whilst also simplifying the legal environment in which the agencies operate.

"The nascent European Security Markets Authority (ESMA), as part of the EU's financial supervisory package, is the right vehicle to ensure the necessary close supervision and, where necessary, imposition of sanctions such as fines or suspension of operating licences if standards are breached."

"There may eventually be a case for creating an EU public rating agency that could evaluate objectively the credit worthiness of sovereign countries, but entirely separate from commercial interests and independent of the ECB."