I mentioned this recent article briefly in the post DeCloet & National Policy 51-201.
Anyway … credit ratings have been in the news, big-time, for the past year. The problem, however, is not so much with the Credit Ratings Agencies themselves, but rather with the regulators and with buck-passing investment managers.
Look for the opinion link!
[...] Update, 2008-5-21: For the article, see Opinion: Credit Ratings – Investors in a Bind. [...]
[...] a step in the right direction, but whether there will be enough information made available that investors can rationally check the credit ratings is something I have not – yet – seen [...]
[...] Now, you’ll never hear me complain about too much disclosure, so I don’t have any major problems with this one … but I’d like to hear a discussion of just how well the philosophy behind this recommendation ties in with Regulation FD and National Policy 51-201. [...]
[...] although I would like to see some of that material non-public information that the company may selectively disclose to these agencies to assist them to a favourable [...]
[...] for Everything. He may, or may not, wish to rely on Credit Rating Agency advice … although, as I have argued, it would be really nice if the Friendly Regulators did not ensure that Credit Rating Agencies have [...]
[...] I may as well say it again: special access by the agencies to material non-public information must be revoked. [...]
[...] exemption from Regulation FD must be repealed. It’s the only way … I’ve written an essay on the topic. Unfortunately, however, addressing this issue would involve the authorities admitting that the [...]
[...] The rule on sharing data is a step in the right direction, but only a step. CRAs are entitled to use material non-public information in the course of their business, a fact which makes second-guessing them a risky business. Strike down the Regulation FD Exemption! [...]
[...] my essay Credit Ratings: Investors in a Bind I argued that the NRSRO exemption to Regulation FD be [...]