Dodd-Frank Act: Ringside Reactions By Rating Agencies - No Mas!
We've followed the issue of rating agency reform over the past year in prior blog postings, where part of the focus was on the lack of liability on the part of the rating agencies (read: zero [-0-] liability).
One immediate result from the passage of the Dodd-Frank Act quickly jumped up last week: as reported by The Financial Times and by the NYTimes, several rating agencies announced that potential legal liability exposure would cause them to not issue ratings for use in certain public prospectuses or debt registrations.
Take a look at those two links - this development is beyond interesting.
So, the rating agencies are simply going to opt out?
Or in fighting parlance: "no mas!"
- is this a long-term decision or merely initial gamesmanship on the part of the rating agencies?
The Commercial Real Estate Finance Council reports that "no fewer than 533 rules, 60 studies and 93 reports will be considered in earnest as U.S. financial regulators begin their duties" in implementing the Dodd-Frank Act.
The next 180-270 days will be an incredible period of suspense and potential change for the rating agencies - or not - as the regulators do their work. (Yes. An army of lobbyist and special interest groups will offer assistance.)
The rating agencies have made a very, very strong first move.
This will be more than interesting.
