Welcome to TheRatingsDebate.com
Performance Trust has spent the last 12 months working to educate various stakeholders in the legislative and executive branches of government about the practical implications of mark-to-market accounting. These efforts culminated in the public testimony by our CEO, Rich Berg before the House Banking Sub-Committee. Another significant effort has been directed towards the development of our blog, MarktoMarketDebate.com. Thanks to your participation, the blog has been a success, and has been used throughout the country to help the public understand the issues behind mark-to-market accounting. We applaud the new rules issued by the Financial Accounting Standards Board (FASB) that address the conflicts we presented in the blog and before Congress.
Today, the debate among financial institutions has shifted away from mark-to-market and toward use of ratings to assess risk. Currently, the House and Senate are reviewing proposed legislation that gives the Securities and Exchange Commission (SEC) more authority to oversee the NRSROs.
We believe the proper understanding of what ratings mean is an issue that needs similar attention.
In this blog, we will feature our perspectives on the ratings issue as well as related opinions and news. Most importantly, this site will invite debate and discussion from all quarters of our economy, and, ultimately, propose new solutions.
Want to help with solving the ratings issues? You can get this vitally important message out to others by TheRatingsDebate.com link on to all your legislative contacts and peers in banking and finance.
Together we can make a difference and help get our banking system and economy back on track.
Help us solve the inherent problems with the bond ratings infrastructure.
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Thank you for getting involved in the discussion of the regulation of NRSROs.
It has been a multi year process for the SEC and Congress and lots of information and opinions have been collected.
Please consider contributing to our open source wiki on the issue of credit raters and other topics before Congress related to financial markets regulation.
To see more on NRSROs:
http://freerisk.org/wiki/index.php/Credit_rating_agencies
These rating agencies have already been largely discredited. It seems like the horse is already out of the barn. They totally missed the mark on the front end…so why should we expect them to nail it now. Why is the Government/regulating community giving these ratings so much weight if no one believes they are accurate?
Stephen: Your assesment is apt. The government / regulatory bodies vilify the ratings agencies and then insist on using them for capital adequacy and risk measument purposes. The ratings are hard wired into the US Financial system. We have to figure out how to use the system we have. It seems improbable we could have a “do-over” and start from scratch. The best we can do is enhance the existing infrastructure to more accurately reflect the risk the rating is trying to communicate.