The Problem with Credit Rating Agencies

By Lisa Valentine

Ethiopis Tafara, Director of the SEC Office of International Affairs, brought up some interesting questions about the use of credit rating agencies during a speech last week at the IOSCO Technical Committee Conference in Basel.

Although he applauded the revised IOSCO Technical Committee Code of Conduct for Credit Rating Agencies, he lamented the lack of enforcement direction. Said Tafara, “While market participants could judge for themselves the value of promises made by a CRA…there was no mechanism by which market participants—or regulators—could verify whether those promises were being kept.”

Editors Note

We see that Jules Kroll recently appeared on CNBC saying that he is looking to start an independent CRA.  Jules has also recently become a member of the board of the Managed Funds Association.  For more info on what Jules is up to search Kroll and K2 Global on google.  Good luck Jules.