The Executive Director of one of the EU's new regulators meets MEPs over credit rating agencies and other issues.

Interview: Still room for improvement in financial market regulation

how big do you think the challenge  will be to form regulations

That regulatory control is a big challenge,  particularly across 27 Member States

with their different markets  and different local needs and demands.

You need to make sure  there's stability in the market

and also that investors are properly  protected. It's a big challenge.

Have we learnt lessons from the crisis?  Are there lessons to be learnt?

both globally, but also in Europe  and the national Member States.

There has been a lot of change  both in the regulations and legislation

that form the basis on which  requirements are checked,

and in the day-to-day supervision  that we do.

Overall, I think many important lessons  have been learnt.

A lot of the talk today  was about credit rating agencies.

There are things to be done. There is  some concern over how they're funded,

the fact that they, for instance, missed  Lehman Brothers when that collapsed.

But are the politicians  tending to shoot the messenger

Credit rating agencies  are a much-debated topic.

I think the reality is that everyone,  including the agencies, accepts

that mistakes were made  before the crisis,

particularly in structured finance ratings  in the mortgage market and so on.

There have been significant changes  in the methodologies,

in the way the rating agencies are  taking decisions and how they are run.

There have also been  significant regulatory changes

both in Europe  and the rest of the world.

That, over time, has created  quite a significant shift

in the approach, the transparency  and other issues.

Having said that, there is still the view  that further steps should be considered

to further reduce the reliance  on credit ratings in the regulation,

which can become  a bit of a self-fulfilling prophecy,

because so many market participants  rely on the ratings

There is clearly a need for transparency  in the business of securities.

Derivatives,  particularly over-the-counter ones,

are almost by their nature very secretive.  The counterparties are involved.

Nobody needs to know  the deal has been done.

How do you ensure transparency  in a market like that?

That's an area where the regulation  is making quite significant changes.

There's a new proposal called EMIR,  which is basically ensuring

that more of the more opaque OTC  or over-the-counter derivatives trades

are moving into cleared  and centrally-traded areas.

Part of the reason for that  is greater transparency.

The other part is greater centralisation of  the different counterparty relationships.

So when one of the counterparties  goes down or has an issue,

there is a central network  in the clearing house

that can deal with those events and sort out  who is the debtor, who is the owner,

and how you make that  ultimately turn out

without creating major corrosive effects  in the market

We are hopefully emerging  from the mire finally.

Will we see a different  securities market after this?

Will we see new markets, perhaps  the Asian markets, in the ascendancy?

that financial markets, and particularly  securities markets, are global markets.

The demand for the type of instruments  that the securities market provides

is clearly growing, particularly  in the emerging, developing markets

that need those types of financial markets  to move away from

a purely banking-financed or  government-financed economic system.

It's not surprising  those markets are growing.

But I think that puts the onus  on regulators

that we do try to come to common solutions  wherever possible,

reducing the possibility  of significant differences

Verena Ross, thank you very much  and good luck.