No to Standard Ratings Terms: SEC Staff

Report calls for greater transparency on how credit raters determine grades.

U.S. Securities and Exchange Commission staff recommended against creating identical terms and stress tests for credit-ratings, while supporting greater transparency on how grades are determined.

Given the difficulty with implementing such standards, “the staff believes it would be more efficient to focus on the rulemaking initiatives mandated under the Dodd-Frank Act, which, among other things, are designed to promote transparency,” the agency’s staff said in a report posted today on its website.

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