ESMA Offers Non-Endorsable Ratings Breathing Room

The European Securities and Markets Authority’s new rating agency endorsement regime—a series of stringency tests to determine if credit ratings made outside the E.U. can be permitted into the region—will give some leeway to ratings that fall short of the E.U. standards. The move comes after industry professionals voiced fears that a wholesale block on non-E.U. ratings would trigger disruption to securitization markets.