EU starts investigation on rating agencies

European market regulators have mounted a probe into three major credit rating agencies on their appraisal practices, local media reported Monday. The investigation by the European Securities and Markets Authority (Esma) is to ascertain whether Standard & Poor's (S&P), Fitch and Moody's Investors Service use precise and transparent methods when evaluating banks, the Financial Times quoted Esma chief Steven Maijoor as saying. The watchdog is not attempting to evaluate or influence the ratings, Maijoor said. "We only ask that their choices make economic sense and be logical." The investigation is expected to finish by the end of this year. Since last year, credit rating agencies have been required by the European Union to register and stay in good standing with Esma. Amid the eurozone crisis, the three appraisers have made massive downgrades of sovereigns and financial institutions, which Maijoor said raised "concerns about whether there are sufficient analytical resources" at the rating agencies.