EU's Barnier says to probe credit rating agencies

BRUSSELS Tue May 4, 2010 6:59am EDT

BRUSSELS May 4 (Reuters) - The European Union's financial services chief said on Tuesday he would investigate how credit rating agencies work following what he said was a surprisingly rapid downgrading of Greece.

"I think we need to go further to look at the impact of the ratings on the financial system or economic system as a whole...," European Internal Markets Commissioner Michel Barnier told members of the European Parliament.

"That's why I asked for responsibility to be assumed in the work they are doing."

Barnier added: "If you look at Greece, for example, I was quite surprised by the quite rapid deterioration in rating."

His comments follow a reminder from the executive European Commission to rating agencies to be careful in their work.

As the European commissioner in charge of financial services regulation, Barnier could propose new rules governing rating agencies. He said on Tuesday it could be possible to start a European agency to rate countries' creditworthiness.

(editing by John Stonestreet)

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