Watch For Change in the "Big House:" The End of Rating Agency Freedom and Liability Exemption?
More in our "Watch For Change" series . . .
While NOT directly relevant to workouts, the Council of Institutional Investors recently issued a white paper (PDF) pushing Congress for stronger oversight and accountability of credit rating agencies.
Briefly, the paper calls for
- "Enhance oversight by creating a new Credit Rating Agency Oversight Board or supplementing the authority of the Securities and Exchange Commission (SEC) to substantively regulate rating agency practices - including disclosure, conflicts of interest and rating methodologies - and reduce reliance on ratings."
- "Remove rating agencies' exemption from liability under the Securities Act of 1933 and make Nationally Recognized Statistical Rating Organizations subject to private rights of action under the anti-fraud provisions of the securities laws."
Just another example of the broad scope of the movement to "correct" current market problems and of the possibility of "new" regulatory bodies and roles.
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