http://www.theratingsdebate.com Fri, 05 Feb 2010 21:33:40 +0000 http://backend.userland.com/rss092 en Well , we got our answer from the SEC. today. Chairman Mary Shapiro  answered the Journal in a letter to the editor. It seems that  the SEC doesn’t want the NRSROs to be the end-all for credit measurements. They are “seeking to reduce an undue reliance on the ratings” and that ... http://www.theratingsdebate.com/the-sec-speaks-out/ The S.E.C. seems to be going back to the same old regulatory structure. Last year, money market funds showed stress, and the US government prevented the funds from breaking the buck. In the future, don’t we want investors to bear the cost of their own decisions? Do we want the government ... http://www.theratingsdebate.com/674/ The free speech provisions of the First Amendment currently protect rating agency opinions. Although in the past the agencies have been sued for ratings given to investments that did not meet stated objectives, the agencies have never been found liable. This is because the burden of proof is the same ... http://www.theratingsdebate.com/proposals-pending-to-eliminate-ratings%e2%80%99-first-amendment-protection/ Interesting commentary from Deven Sharma, president of Standard and Poor’s.  Say what you will about the rating agencies and their role in contributing to the credit crisis (we would agree with much of the finger pointing, although certainly not all of the blame goes to them), but he makes some ... http://www.theratingsdebate.com/s-p-presidents-letter-to-the-editor/ The insurance industry regulators have prevailed. The rule change is in effect and billions in capital has not been squandered. This common sense approach to capital measurements takes into account the economic value of a bond and its cost basis. When determining the value of anything, isn’t what you paid for ... http://www.theratingsdebate.com/good-news-for-life-insurers/ Well, they got it done. The National Association of Insurance Commissioners saved an approximately $5B in industry capital by ignoring the NRSRO ratings and using a recognized 3rd party to evaluate mortgage backed securities. The NAIC understood that the rating only described the first dollar of loss, not the magnitude of ... http://www.theratingsdebate.com/655/ While not directly related to ratings, which is the main topic of this blog, the article below discusses a key related issue:  capital shortages at banks and their drag on lending.  A revamp of the ratings system could actually help address this problem because a carefully crafted restructuring of the ... http://www.theratingsdebate.com/is-the-tide-turning/ The attached article talks about how the House recently made extensive progress towards eliminating all language from both laws and financial regulation rules that references rating agencies (NRSROs).  The "system" will no longer depend on such agencies.  These are the first steps of progress towards reform and are commendable.  However, ... http://www.theratingsdebate.com/will-new-ratings-reforms-be-effective/ Representative Paul Kanjorski D-PA has proposed that the federal rule be dropped that requires credit ratings to determine what an asset is worth, and therefore determine capitalization. Representative Kanjorski’s intent is to distance the Federal Government from a de facto endorsement of ratings agencies’ work. In its own right, this ... http://www.theratingsdebate.com/a-good-idea/ The ratings agencies’ primary role is to serve as an independent and completely neutral evaluator of an investment’s risk. In the simplest sense, the agencies are the referees at the basketball game. And like the referees, their responsibility is to assure an honest and clean game for the thousands who ... http://www.theratingsdebate.com/it%e2%80%99s-time-for-independence/