From the October 2009 issue of Treasury & Risk magazine

New Rating Agency Rules Fall Short, Critics Charge

The Securities and Exchange Commission (SEC) is taking steps to rein in credit rating agencies after the agencies' assessments of structured securities were cited as one of the factors in last year's financial meltdown. But critics question whether the new rules the SEC approved in September will make much difference in the way credit raters go about their business.

The SEC mandated more transparency from rating agencies, ranging from a requirement that they make the history of their ratings freely accessible to rules that they disclose more about compliance efforts, about limitations on the scope of their ratings, and about "ratings shopping." The rating agencies will also need to disclose more information about possible conflicts of interest.


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