
New SEC rules aim to curb credit rating agencies
LOSSES & LAWSUITS
WASHINGTON, DC - The US Securities and Exchange Commission (SEC) is to introduce new rules aimed at increasing the accountability of credit rating agencies (CRAs). The new rules would involve banning ratings agencies from consulting with investment banks whose products they rate. SEC chairman Christopher Cox told the Senate Banking Committee that, as part of its investigation into how securities such as collateralised debt obligations, which CRAs were blamed for exacerbating the subprime crisis by giving low-risk ratings to high risk and ultimately illiquid products, were rated, his staff had seen "that the ratings process used to rate these products may have been less quantitatively developed than was generally believed".
The rules aim to increase the accountability of CRAs by requiring them to release the information used to rate subprime mortgage-backed securities to allow consumers to judge how the agencies operate and to compare the performance of the various agencies.
The new rules will be introduced "in the near future", according to Cox.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
SEC cyber rules risk creating web of confusion and costs
Proposals would require breach notifications, public disclosures and annual cyber assessments
Indonesia readies close-out netting after passing P2SK Law
Bankruptcy law changes remove close-out netting obstacles
Behnam comments fan JSCC hopes for US client clearing
Japan clearing exec welcomes CFTC chair’s pledge to keep discussing OTC clearing status for non-US houses
Top 10 operational risks: The umpire strikes back
Tougher regulatory enforcement, new consumer rules and rise of ESG are ringing alarm bells
SVB wouldn’t happen in Europe, says Deutsche CIB head
Campelli also thinks Credit Suisse’s bailed-in AT1 bonds acted as originally intended
How Finma milked Credit Suisse’s CoCos to close UBS deal
An unusual clause in Swiss AT1 bonds allowed them to be written off, but could others follow suit?
Fed’s climate stress test whips up storm for banks
Long-awaited US climate risk exercise puts tough pressure on banks’ data and models