What’s to be Done With Rating Agencies

By Rosa M. Abrantes-Metz on October 8, 2013

In the Fall 2013 issue of the ABA’s Exchange, Kristiyana Teodosieva  and I ask “What’s to be Done with Rating Agencies?” Inaccurate ratings by CRAs is a problem of quality that stems not from a lack of competition among CRAs, but from the monopsony power in the structured finance market, a power which leads to rating shopping. Limiting the number of CRAs and guaranteeing them some degree of participation in the structured finance rating market is necessary if the more conservative credit opinions are to be revealed and the market is to be improved. Having more CRAs may only worsen the problem.  You can read our full exploration of the topic here: What’s to be Done With Rating Agencies?

About the Author

Name
Rosa M. Abrantes-Metz
Title/Location
Managing Director, New York
Phone
917-499-4944
Expertise
antitrust/competition policy, financial regulation, securities