G20 pledge to reduce reliance on credit ratings is proving a hard slog
* Financial sector too reliant on credit ratings from agencies
* G20 set mid-2015 deadline for plans to reduce reliance on ratings
* Financial Stability Board says deadline will be missed
* Finding alternative ways to assess risk proving difficult
By Huw Jones
LONDON, May 12 (Reuters) - Weaning the financial world away from heavy use of credit ratings is proving harder than expected as workable alternatives are taking time to put in place, global regulators said on Monday.
Leaders of the G20 group of leading economies pledged to end heavy "mechanistic" reliance on ratings in the financial sector after bundled loans based on U.S. mortgages became untradable in 2007 despite being highly rated, triggering a global financial markets and banking meltdown.
Credit ratings are also used to quantify risks at banks and determine how much capital they should hold, but finding alternatives to ratings, such as asking investors to do their own credit assessments on products sold by banks, has been hard.
The ratings agency sector is dominated globally by the "Big Three": Moody's, Standard & Poor's and Fitch. Continua...