Post by jannikki on Aug 2, 2006 18:41:33 GMT -4
Senate panel approves rules on credit-raters
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Robert Schroeder, MarketWatch
Last Update: 3:20 PM ET Aug 2, 2006
WASHINGTON (MarketWatch) -- The Senate Banking Committee approved a bill Wednesday that would overhaul rules on credit-rating agencies, in a move that supporters say would increase competition in the industry and protect investors.
The bill gives the Securities and Exchange Commission authority to regulate the companies, including Standard & Poor's, Moody's Corp. and A.M. Best.
Rating firms would have to show the track record of their ratings on companies, disclose their procedures used to determine ratings and describe any conflicts of interest. The SEC won't be able to determine criteria or methodologies used by the credit-raters to do their work, however.
Banking Committee Chairman Richard Shelby, R-Ala., held a working session on the bill Wednesday morning but not enough senators attended to hold a vote. The bill was approved on a voice vote in the afternoon.
"By increasing competition, the bill will protect investors by improving ratings quality and providing greater transparency and accountability," Shelby said in a statement.
Sen. Paul Sarbanes of Maryland, the committee's ranking Democrat, noted broad support for the bill including from mutual-fund, bond market and labor groups.
McGraw-Hill Cos. Inc. unit Standard & Poor's and Fitch Ratings praised the bill earlier this week.
Fitch said the bill is a "significant step forward" for enhancing competition in the ratings industry.
New applicants seeking to register with regulators would have to operate as credit-raters for three years and have letters from institutional investors attesting to the quality of their ratings.
A competing House version of the bill would speed the registration process to three months. The Senate bill would have to be approved by the full Senate and reconciled with the House version passed in July.
Critics have faulted credit-rating agencies for failing to spot impending meltdowns at big companies like Enron and WorldCom. The industry is dominated by S&P and Moody's.
Other "nationally recognized" credit-raters are A.M. Best Co., Dominion Bond Rating Service Ltd. and Fitch Ratings, a unit of Fimalac.
Separately, Moody's on Wednesday beat Wall Street's earnings mark with an 18% rise in second-quarter earnings, and issued an upbeat outlook in the face of rising interest rates.
www.marketwatch.com/News/Story/Story.aspx?guid=%7BC2484833%2D8523%2D4F0D%2DAA92%2D3C7DFE3F3972%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
Maybe this is a good example of why the Senate Banking Committee fails to see the problems in the market today....they are too busy to attend meetings.....too busy to do their damn jobs!
I think I am going to be too busy on election day, campaigning for someone else ,who will do their job!
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Robert Schroeder, MarketWatch
Last Update: 3:20 PM ET Aug 2, 2006
WASHINGTON (MarketWatch) -- The Senate Banking Committee approved a bill Wednesday that would overhaul rules on credit-rating agencies, in a move that supporters say would increase competition in the industry and protect investors.
The bill gives the Securities and Exchange Commission authority to regulate the companies, including Standard & Poor's, Moody's Corp. and A.M. Best.
Rating firms would have to show the track record of their ratings on companies, disclose their procedures used to determine ratings and describe any conflicts of interest. The SEC won't be able to determine criteria or methodologies used by the credit-raters to do their work, however.
Banking Committee Chairman Richard Shelby, R-Ala., held a working session on the bill Wednesday morning but not enough senators attended to hold a vote. The bill was approved on a voice vote in the afternoon.
"By increasing competition, the bill will protect investors by improving ratings quality and providing greater transparency and accountability," Shelby said in a statement.
Sen. Paul Sarbanes of Maryland, the committee's ranking Democrat, noted broad support for the bill including from mutual-fund, bond market and labor groups.
McGraw-Hill Cos. Inc. unit Standard & Poor's and Fitch Ratings praised the bill earlier this week.
Fitch said the bill is a "significant step forward" for enhancing competition in the ratings industry.
New applicants seeking to register with regulators would have to operate as credit-raters for three years and have letters from institutional investors attesting to the quality of their ratings.
A competing House version of the bill would speed the registration process to three months. The Senate bill would have to be approved by the full Senate and reconciled with the House version passed in July.
Critics have faulted credit-rating agencies for failing to spot impending meltdowns at big companies like Enron and WorldCom. The industry is dominated by S&P and Moody's.
Other "nationally recognized" credit-raters are A.M. Best Co., Dominion Bond Rating Service Ltd. and Fitch Ratings, a unit of Fimalac.
Separately, Moody's on Wednesday beat Wall Street's earnings mark with an 18% rise in second-quarter earnings, and issued an upbeat outlook in the face of rising interest rates.
www.marketwatch.com/News/Story/Story.aspx?guid=%7BC2484833%2D8523%2D4F0D%2DAA92%2D3C7DFE3F3972%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
Maybe this is a good example of why the Senate Banking Committee fails to see the problems in the market today....they are too busy to attend meetings.....too busy to do their damn jobs!
I think I am going to be too busy on election day, campaigning for someone else ,who will do their job!