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NEW YORK, March 4 (Reuters) - Standard & Poor's said in a new report on Wednesday it may back a separate rating scale for complex bonds, and that a globally coordinated regulatory regime is needed to restore market confidence.
"Achieving consensus on the mechanics of such a globally coordinated regime is not simple," S&P president Deven Sharma said in a statement. "However, such an effort is important if we are to arrive at a solution ... that helps restore confidence in the global capital markets."
S&P said regulation of credit rating agencies will play an "important role in building confidence in the marketplace."
The paper outlined 10 broad goals that the rating firm said should guide policy-makers internationally. Among the proposals:
- Ratings should be independently derived, credible, unbiased and accountable. However, policy-makers should preserve the independence of ratings and ratings methods;
- a regulatory regime should require a mechanism for ratings users to raise questions about methods;
- ratings on new and complex securities should be differentiated, either through separate rating scales or providing more information about the risk;
- ratings performance statistics, including comparability of ratings across asset classes and geographies, should be publicly disclosed.
"These are some of the principles that we believe should guide thinking on the future regulatory framework for ratings firms," Sharma said. (Reporting by Walden Siew, Editing by Chizu Nomiyama)
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