In the Fall 2013 issue of the ABA’s Exchange,Â Kristiyana Teodosieva Â and I ask “What’s to be Done with Rating Agencies?”Â 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. Â You can read our full exploration of the topic here:Â What’s to be Done With Rating Agencies?
What’s to be Done With Rating Agencies
By Rosa M. Abrantes-Metz on October 8, 2013