The Financial Stability Board has continued global regulatory efforts to reduce reliance on credit rating agencies (CRAs), releasing principles endorsed in broad terms by the Group of Twenty.  These principles do not go as far as recent law in the U.S. that expressly bars regulatory reliance on CRAs, but does seek to limit their use and improve both financial-institution and supervisory ability to assess credit risk.  They also address numerous issues not yet a focus of U.S. attention, such as the use of CRA determinations by central banks, institutional investors and investment managers (e.g., insurers and pension funds).  Importantly, they for the first time address CRA use in private arrangements, urging regulators to limit or bar use of CRAs for purposes such as counterparty margining and collateral calls.
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