(CN) – The European Commission announced plans to tighten regulation of ratings agencies after Standard and Poor’s erroneous downgrade of France’s credit rating last week.
The New York-based financial services company sent a message to some subscribers of a global credit portal on Thursday, wrongly saying it had downgraded France from its AAA rating.
Standard and Poor’s sent out a correction almost two hours later and said it took steps to prevent the mistake from happening again. Upon investigation, S&P found that a technical glitch had caused the false downgrade.
The mistake sent French government bonds into a downslide; outraged French regulators Friday opened their own probe into the incident.
On Tuesday, EU Financial Commissioner Michel Barnier announced draft legislation to tighten rules for credit rating agencies.
“This incident is serious and it shows that in the current tense and volatile market situation, market players must exercise discipline and demonstrate a special sense of responsibility,” Barnier said in a statement about the mistaken downgrade.
The new rules aim to reduce reliance on credit ratings, increase competition and transparency, and allow for civil liability in cases of gross negligence.