According to reports, the new European Securities and Markets Authority would have oversight for agencies operating within the territory as well as offices outside the EU. The step follows criticism leveled at agencies, which suggested the current debt crisis within the EU has been worsened by their grading.
A second piece of proposed legislation calls for an overhaul of the way banks are managed, which included analyzing how corporate boards are established and remuneration processes for top bankers.
Michel Barnier, EU financial services commissioner, said: “The changes to rules on credit rating agencies will mean better supervision and increased transparency in this crucial sector.
“But they are only a first step. We are looking at this market in more detail.”
The new agency would see national bodies transfer their supervisory powers to it under the terms set out by the EU.
Heads of member states are expected to discuss financial regulation when they meet at the G20 summit in Canada later on in June.
