Investor Protection in Credit Rating Agencies' Non-Contractual Liability : The Need for a Fully Harmonised Regime

The development of EU financial regulation after the financial crisis has been characterised by a growing attention given to supervision and enforcement rules, in order to guarantee both the stability of the markets and the protection of investors. In this context, the regulation of credit rating agencies (CRAs) has a unique feature, in that it includes a specific private enforcement measure aimed at providing an adequate right of redress for investors. After a brief analysis of the rationale for the EU regime concerning the civil liability of CRAs, and mainly from two different perspectives, this article focuses on the effectiveness of this new approach in guaranteeing a high and uniform level of investor protection. The first perspective involves an investigation into the substantive rules set out at EU level with a view to understanding how they may affect future litigation between investors and CRAs. The second perspective examines the negative effects of the minimum harmonisation approach — at both the substantive and private international law levels — on the objective of achieving consistency when it comes to investor protection across the EU. By comparing earlier perspectives with the findings herein, the article concludes that a higher degree of harmonisation is required. Drawing on other fields of EU legislation, it also suggests certain reforms