Rating Agencies: Disease and Cure

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3 Responses

  1. Frank Pasquale says:

    I’ve learned a lot from Jeff’s previous work and look forward to reading this. By the way, here are some ideas Alan Blinder mentioned:

    “My Princeton colleague Dilip Abreu suggests paying ratings agencies with some of the securities they rate, which they would then have to hold for a while. Robert Pozen, head of MFS Investment Management, wants independent investors in the conduits to hire the agencies instead. Another idea would have a public body, like the S.E.C., hire the agencies, paying the bills with fees levied on issuers. If you have a better idea, write your legislators.”

    from

    http://www.nytimes.com/2008/05/04/business/04view.html?scp=3&sq=blinder%20rating&st=cse

  2. Bobo Linq says:

    Scholars have long berated the rating agencies, especially Frank Partnoy.

    Unless Partnoy is a rating agency, you might want to write:

    Scholars — especially Frank Partnoy — have long berated the rating agencies.

  3. I think we Credit Ratings Agencies should disclose how they are getting paid. I also think they shouldn’t have a government charter or be connected in any way to the SEC. Their formal role as regulators probably helped deceive investors in some fashion.