Will SEC Become the Seal of Good Housekeeping for Credit Ratings?

June 2010
Securities Industry News;6/21/2010, Vol. 22 Issue 12, p18
Trade Publication
The article examines the role of the U.S. Securities and Exchange Commission (SEC) in managing the conflict-of-interest issue involving credit ratings. The conflict-of-interest rules are seen to lead to faulty modeling and rating of huge amounts. Michael Lewis' book "The Big Short" explains how Goldman Sachs and Standard & Poor's influenced the rating process. New functions for the SEC are presented in terms of imposing fines and writing rules. The need to do away with a Nationally Recognized Statistical Rating Organizations model is explained.


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