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Tag Archives: Moodys

How to untangle the credit rating agency’s conflicts of interest

The House and Senate conferees worked hard to today to reconcile their versions of financial reform. Agreement was reached on private funds, insurance regulation and the merger of bank regulators. A sticking point was on Subtitle C of Title IX which covers credit rating agencies. I’d like to recommend to Chairman Barney Frank and others that they propose […]

Vigilante silencioso

From Chicago Public Radio… This American Life… ~~~~ Since Congress hasn’t held 1930’s-style hearings into the causes of the financial crisis, we stage one of our own.  The subject? The regulators and watchdogs who were supposed to be overseeing the banks and the finance industry—to make sure things wouldn’t blow up like they have.  Clearly […]

Conflict supposition

~~~~”McDaniel this month defended the credit raters’ issuer-pay model at an SEC roundtable in Washington, saying that investors can pressure ratings companies just as easily as underwriters….”*~~~~ This will become the central argument in defense of the “issuer pay” model for credit ratings agencies…. The SEC receives information from credit rating agencies as part of […]

SEC roundtable on credit rating agencies

 The SEC credit ratings roundtable will be webcast here… Here is the agenda…  and some coverage from the WSJ.com…

Extend Regulation Fair Disclosure to the fixed income markets

US and global bond markets have been in deep distress. The reverberations have been manifested in the worldwide banking system. Substantial public and private capital has been injected into the banking system to stabilize the largest banks and other financial institutions. Lawmakers have been examining issues in the banking and finance areas. The flow of […]

ra ra ra rating shopping

Everyone has missed the main point of the problem of the Federal Reserve mandating the use of ratings from Moody’s, S&P and Fitch for the TALF program … the problem is rating shopping… Which means that issuers of the securities that the Federal Reserve is buying have shopped around for the best ratings… selectively disclosed […]

Crowdsourcing ratings

From Fast Company… ~~~~ FreeRisk: Crowdsourcing Credit Ratings? BY Kermit Pattison  Fri Apr 3, 2009 at 11:00 AM The recent financial meltdown demonstrated that credit rating agencies were blind to the dangers ahead. Toby Segaran of Metaweb Technologies and Jesper Andersen of the Open Data Group hope that crowdsourcing and transparency can help fix this mess. They […]

can produce facts showing the rating agencies “knowingly or recklessly failed” to conduct a “reasonable investigation” of a rated security

UPDATE:US Sen Bill Would Make It Easier To Sue Credit-Rating Firms Of DOW JONES NEWSWIRES ~~~~ “WASHINGTON (Dow Jones)–Credit-rating agencies could become more susceptible to class-action lawsuits if they knowingly or recklessly misrepresent the risks of the securities they rate under a pending Senate proposal. Sen. Jack Reed, D-R.I., who chairs the Senate Banking Securities […]

Legislative oppurtunities

Bloomberg is reporting that new efforts are being made in Congress to rein in the dominant rating agencies… specifically it looks like legislation would remove the First Amendment protections that raters have stood behind when deflecting liabilities for their opinions… this would be a substantive change in the business and welcome…  ~~~~Reed Seeks Expanded Liability […]

2005 cohort

From my comments to the SEC on raters…. Is the proposed application of the rule to prospective credit ratings, i.e., credit ratings that are initially determined on or after June 26, 2007, appropriate and do commenter’s believe it would provide meaningful information if the rule was limited to credit ratings made on or after that date? […]