The Telegraph (July 12)
Dagong Global Credit Rating Co tossed its hat into the ratings ring, offering very different ratings than Fitch, S&P or Moody’s. Dagong is painting “a revolutionary picture of creditworthiness around the world,” exclaims the Telegraph. The Chinese rater puts Norway, Denmark, Switzerland, Australia, New Zealand and Singapore at AAA; China, Germany, the Netherlands and Canada at AA+; the U.S. at AA; Britain and France at AA-; and Belgium, Spain and Italy at A-. Meanwhile, another silent revolution has taken place. Emerging countries now hold $6.3 trillion or 75% of the world’s reserves.
Tags: Creditworthiness, Dagong, NRSROs, Sovereign debt
The Wall Street Journal (June 17)
Nationally recognized statistical ratings organizations (NRSROs) may finally be on their way out. The Journal calls it a miracle, giving much credit to Congressman Barney Frank who “is close to eliminating one of the root causes of the financial meltdown of 2008.” Not yet a done deal, it looks as if all requirements to use NRSROs will be eliminated from federal laws and regulations.
Wall Street Journal (May 14)
The WSJ hopes Nationally Recognized Statistical Ratings Organizations (NRSROs) will be eliminated. NRSROs include organizations such as S&P, Moody’s and Fitch which “put triple-A seals of approval on dubious securities at the heart of the financial panic.” In a promising development, a Senate amendment, which would eliminate NRSROs from U.S. laws and regulations, passed by 61-38.
The WSJ hopes Nationally Recognized Statistical Ratings Organizations (NRSROs) will be eliminated. NRSROs include organizations such as S&P, Moody’s and Fitch which “put triple-A seals of approval on dubious securities at the heart of the financial panic.” In a promising development, a Senate amendment, which would eliminate NRSROs from U.S. laws and regulations, passed by 61-38.
New York Times (May 2)
Lashing out at Wall Street Banks is now an American pastime, but the credit ratings agencies “bear as much responsibility for the financial crisis as the banks.” Largely forgotten is the role Moody’s, S&P and Fitch played. Investors and financial institutions would never have purchased as many mortgage-backed securities and collateralized debt obligations (CDO’s) had the raters properly warned investors that these were essentially “high-tech junk bonds,” rather than triple-A securities. Current proposals aimed at reforming the ratings agencies are not enough. The newspaper supports drastic steps to improve the ratings system.
Lashing out at Wall Street Banks is now an American pastime, but the credit ratings agencies “bear as much responsibility for the financial crisis as the banks.”
Largely forgotten is the role Moody’s, S&P and Fitch played. Investors and financial institutions would never have purchased as many mortgage-backed securities and collateralized debt obligations (CDO’s) had the raters properly warned investors that these were essentially “high-tech junk bonds,” rather than triple-A securities. Current proposals aimed at reforming the ratings agencies are not enough. The newspaper supports drastic steps to improve the ratings system.
Tags: Banks, CDOs, Fitch, MBS, Moody's, NRSROs, Ratings agencies, S&P, U.S., Wall Street
New York Times (April 26)
Nobel winner Paul Krugman writes rating agencies, such as Moody’s and S&P, were at the heart of the financial crisis. “Of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent….have now been downgraded to junk status.” E-mails show the ratings agencies bent rules to get business and “skewed their assessments to please their clients.” Krugman calls for fundamental reform of the corrupt ratings system.
Nobel winner Paul Krugman writes rating agencies, such as Moody’s and S&P, were at the heart of the financial crisis. “Of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent….have now been downgraded to junk status.” E-mails show the ratings agencies bent rules to get business and “skewed their assessments to please their clients.” Krugman calls for fundamental reform of the corrupt ratings system.
Tags: Moody's, NRSROs, Ratings agencies, S&P
