• 18 Jun 2009 at 10:12 AM

Rating Agencies Emerge Victorious From Regulatory Overhaul

By

Rating Agencies.jpgWhile there are many sectors of the financial services industry that likely feel they were on the losing end of yesterday’s 80+ page regulatory reform proposal, there was one true winner- the rating agencies. In fact, the proposal has arguably strengthened their position. The proposal does not address the misalignment of interests between the agencies and issuers, but does recommend less reliance on ratings alone when making investment/credit decisions while remaining silent on encouraging new firms to enter the market.
So, in effect, the proposal recognizes the ratings are worthless and shouldn’t be relied on but doesn’t want any new competitors who might be slightly more competent to add a shred of legitimacy to the process and capitalize on the quid-pro-quo fee arrangement which will remain intact. It looks like the proposal’s subtitle, A New Foundation: Rebuilding Financial Supervision and Regulation, needs an overhaul of its own.
Overhaul Leaves Rating Agencies Largely Untouched [NYT]

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Comments (15)

  1. 1
    Posted by guest | June 18, 2009 at 10:30 AM

    Coked up Laser shark misses the muffster.

  2. 2
    Posted by guest | June 18, 2009 at 10:32 AM

    That is one douchy piece of clipart.

  3. 3
    Posted by guest | June 18, 2009 at 10:32 AM

    Coked up Laser shark misses the muffster.

  4. 4
    Posted by guest | June 18, 2009 at 10:33 AM

    BLANUS!

  5. 5
    Posted by guest | June 18, 2009 at 10:34 AM

    My laser cat double posted.
    - Laser Shark

  6. 6
    Posted by guest | June 18, 2009 at 10:35 AM

    Come on Greggers, don’t you know how to use the transparency tool in Powerpoint when copying a picture? For the love, get it together, rook. This is bush league!

  7. 7
    Posted by guest | June 18, 2009 at 10:40 AM

    6 I don’t know how to use it either. Thank god.

  8. 8
    Posted by guest | June 18, 2009 at 10:42 AM

    Does Powerpoint have an anal bleaching feature as well?

  9. 9
    Posted by AndrewInGreenwich | June 18, 2009 at 10:43 AM

    Greg,
    You should have used a dash, not a hyphen.
    Regards,
    AIG

  10. 10
    Posted by guest | June 18, 2009 at 11:02 AM

    It ain’t the Government’s fault investors are lazy.

  11. 11
    Posted by guest | June 18, 2009 at 11:19 AM

    Greg, how exactly would competition between rating agencies make them any more legitimate or reliable?
    Also, the picture for this post confirms what I’ve always suspected: Greg is an art school drop-out.

  12. 12
    Posted by guest | June 18, 2009 at 11:55 AM

    Shit. Macke’s car people argument is becoming more sane by the day. Nod your head if you understand.

  13. 13
    Posted by guest | June 18, 2009 at 12:34 PM

    The rating agencies do a decent job at the stuff they understand such as sovereign debt, municipal and corporate credit; but they should be banished from profiting in the structured finance market because they simply have no idea what they’re doing.

  14. 14
    Posted by guest | June 18, 2009 at 1:04 PM

    @13. If 2007-2009 are indicative, Wall Street has no idea what it is doing in the structured finance market either.

  15. 15
    Posted by Basil Waterfall | May 10, 2012 at 3:14 AM

    Glad I have been some help

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