EUROPE - European regulators should recognise standard registrars or assurance quality evaluators who provide ISO certificates of compliance as an alternative to credit rating agencies to assess risk, according to a fiduciary rating agency.
“There is no research that is really available to shareholders, and going further than research, there’s no risk measurement,” said Robert Pouliot, managing partner of RCP and Partners, a Geneva based rating agency. “
The credit rating agencies essentially measure expected return, but not the risk of investing the company. The registrar is involved in a number of operational aspects. They measure IS9000, or ISO18000, and by doing so, they already have an ‘engineering view’ of the company as opposed to a strictly financial view.“
European and international regulators should therefore look to registrars as complementary bodies to credit rating agencies, Pouliot said.
“I feel that the regulators - whether the European regulator or the international securities commission organisation - should look at registrars are an alternative or complement to credit rating agencies,” he explained.
Credit rating agencies - and particularly the three largest agencies, Standard & Poor’s, Fitch and Moody’s - have a “kind of monopoly” on risk assessment at the moment, Pouliot said. But there are more than 160 registrars who have no more than 10-12% market share, and their more competitive positioning means that there is more competitive. Their standards are also more transparent and are well published, Pouliot added.
“Credit agencies have gone far too far in claiming to have the only approach to monitor the mother of all risk - credit risk,” Pouliot said. “There is fiduciary risk for us that is as important, and the other side of the same coin.”
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