Credit rating agencies are coming under fresh criticism–this time for the role they have played in the structured finance market meltdown. Less than a year ago, President George Bush signed into law the Credit Rating Agency Reform Act of 2006, establishing a new registration process to becoming designated as a Nationally Recognized Statistical Rating Organization (NRSRO). Many thought it would bring greater transparency–and rigor–to the ratings process and put an end to the duopoly of Standard & Poor's Corp. and the Moody's Investors Service. Now, the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises has announced hearings on the role of the credit rating agencies in the current structured finance crisis. Perhaps more telling is the assessment by investors: The stock of the McGraw-Hill Cos, which owns S&P, is down 29.7% year-to-date, while Moody's Corp., more of a ratings agency pure play, has sunk 37.9%.

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