The Senate Banking Committee has scheduled a hearing this morning at 9:30am. SEC Chairman Christopher Cox will be sharing his views on the role of credit rating agencies and other current topics.
To hear a broadcast of the hearing live go here…
The SEC gave final regulatory approval to the consolidation of the member firm regulatory functions of the National Association of Securities Dealers, Inc. and NYSE Regulation, Inc., a wholly-owned subsidiary of New York Stock Exchange LLC.
The Commission approved rule changes that allow for the consolidation of member firm regulation into a single, consolidated self-regulatory organization. The […]
Outstanding interview with James Grant, of Grant’s Interest Rate Observer, on Bloomberg from July 13, 2007.
Mr. Grant talks at length about the approach the rating agencies took when evaluating MBS…he makes the point that the agencies were too “model driven” and didn’t delve into the soundness of the underlying loans for real estate…as usual Mr. Grant lays it all bare…
See […]
In the current sub-prime crisis much of the discussion relates to the length of time it took for the rating agencies to downgrade the MBS and CDOs of MBS. The implied criticism is that the rating agencies were not actively surveying the credit quality of the securities.
The new SEC rules implementing the Credit Rating Agency Reform Act of 2006 […]
From The Epicuean Dealmaker… liquidity be drying up real quick…
“Well, Cerberus Capital Management just exercised the Chrysler Put. News broke this morning that it has abandoned the attempt to sell $12 billion of loans to help finance the purchase of the perennially troubled automaker. Apparently it couldn’t negotiate acceptable terms with potential investors, because would-be lenders kept […]
Uh oh… Cuomo joins probe of credit rating agencies…
In response to an Op-Ed in the NY Times today by Joshua Rosner, I sent the following letter to the editor…maybe they will print it…
“In ‘Stopping the Subprime Crisis’ (July 25, 2007) the author makes many points about the performance and role of credit rating agencies. He is entirely correct in highlighting their importance to the fixed […]
From an article in FT.com via MSNBC…
“A top credit trader half-jokingly told me that 90 per cent of Wall Street is in the business of arbitraging ratings. This often involves betting on clever debt structures that achieve certain ratings but pay investors more interest than similarly rated, old-fashioned bonds.”
There is a fair amount of discussion about the “oligopoly” of credit ratings agencies…(See here in an excellent Economist article.) The main thrust seems to be that it is the dominant ratings agencies which control the ratings market… but recent events suggest that it is the underwriters who allocate market share…
The WSJ is reporting that ”Moody’s […]
Excellent post on the Oser View blog about the structured finance market, rating agencies and models developed with minimal historic data… (David Oser, chief economist at ShoreBank writes the Oser View). From the blog:”Despite the rating services’ disclaimers and warnings, investors often rely so heavily on credit ratings that their investment policies require them to […]
