It is the clearest warning yet from the 27-country bloc's executive to an industry that senior European officials have criticised privately for being too harsh in downgrading Greece as it teetered on the edge of financial collapse.
"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," Michel Barnier, the commissioner in charge of an overhaul of financial services, told the European Parliament.
"The power of these agencies is quite considerable not only for companies but also for states. That's why I asked for responsibility to be assumed in the work they are doing," he said, adding that the Commission would examine possible conflicts of interest.
"If you look at Greece, for example, I was quite surprised by the quite rapid deterioration in rating," he said.
Signalling his dissatisfaction that just three companies - Standard & Poor's, Moody's and Fitch - dominate the industry, Barnier said he was examining the idea of a new agency which could rate governments.
In his role as commissioner, Barnier has significant power in deciding how rating agencies are allowed to do business.
Although a new legal regime for the agencies, which will demand they explain how they make decisions on downgrades, is set to start this December, Barnier could further beef up the rules.
Debt-laden Greece, which was last weekend bailed out by a 110 billion euro rescue from European neighbours and the International Monetary Fund, has been marked down to junk status by S&P and now hovers close to Pakistan in the credit stakes.
European officials want the muscle of Greece's eurozone partners such as Germany and France to be taken into account when calculating a eurozone country's financial health.
Rating agencies had been blamed for carelessness before the Greek crisis, handing out over-generous ratings on the packets of mortgage-backed securities that subsequently unravelled into a credit crunch, sending the global economy into a spin.
(EurActiv with Reuters.)
