Home › Forums › Financial Markets/Economics › The Tea Party downgrade
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August 8, 2011 at 1:39 PM #717354August 8, 2011 at 1:48 PM #716160jstoeszParticipant
[quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.
August 8, 2011 at 1:48 PM #716251jstoeszParticipant[quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.
August 8, 2011 at 1:48 PM #716850jstoeszParticipant[quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.
August 8, 2011 at 1:48 PM #717001jstoeszParticipant[quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.
August 8, 2011 at 1:48 PM #717359jstoeszParticipant[quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.
August 8, 2011 at 2:17 PM #716185briansd1Guest[quote=jstoesz][quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.[/quote]
jstoesz, the Dodd-Frank bill forces the ratings agencies to be more transparent. The ratings agencies are now less likely to give AAA ratings to junk mortgage securities.
Credit Rating Agency Regulation
The Act directs the SEC to establish a new Office of Credit Ratings to oversee and examine credit rating agencies and promulgate new rules for internal controls, independence, transparency and penalties for poor performance. Nationally recognized credit rating agencies will be required to establish, maintain, enforce and document an effective internal control structure and submit an annual internal controls report to the SEC. The Office of Credit Ratings will be required to conduct at least annual examinations of all nationally recognized credit rating agencies and make reports of its findings publicly available. Credit rating agencies will be subject to new disclosure requirements that mandate public disclosure of ratings methodologies, use of third parties’ due diligence and ratings track records, as well as material changes made to, or material errors identified in, ratings procedures or methodologies. The Act authorizes the SEC to penalize nationally recognized credit rating agencies for failing to consistently produce accurate ratings and establishes a new private right of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source.
The conference committee removed a provision in the Senate version of the bill that would have required the establishment of a new self-regulatory organization charged with assigning the task of providing initial credit ratings for certain structured finance products to qualified credit rating agencies. The Act instead requires the SEC to undertake a two-year study for the purpose of determining an independent method for matching credit ratings agencies with issuers, so as to mitigate conflicts of interest in the selection process for ratings of structured finance products.
In an effort to curb reliance on credit ratings, the Act mandates that references to credit ratings be removed from certain statutes and that the SEC conduct studies on, among other things, the standardization of credit ratings.
In a late addition by the conference committee, the Act includes a provision that nullifies Rule 436(g) under the Securities Act of 1933 (the “Securities Act”), which currently exempts nationally recognized credit rating agencies from the requirements under the Securities Act that apply to experts and, importantly, exempts credit rating agencies from Section 11 liability when ratings are included in Securities Act registration statements. The rescission of Rule 436(g) will mean that the rating agencies must provide written consent before their ratings can be included in registration statements. This will have an immediate impact in the context of registered structured finance issuances, which rely directly on credit ratings, and it may take on even greater importance if the SEC promulgates rules requiring the inclusion of ratings disclosure in the registration statements of corporate debt issuers.
August 8, 2011 at 2:17 PM #716276briansd1Guest[quote=jstoesz][quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.[/quote]
jstoesz, the Dodd-Frank bill forces the ratings agencies to be more transparent. The ratings agencies are now less likely to give AAA ratings to junk mortgage securities.
Credit Rating Agency Regulation
The Act directs the SEC to establish a new Office of Credit Ratings to oversee and examine credit rating agencies and promulgate new rules for internal controls, independence, transparency and penalties for poor performance. Nationally recognized credit rating agencies will be required to establish, maintain, enforce and document an effective internal control structure and submit an annual internal controls report to the SEC. The Office of Credit Ratings will be required to conduct at least annual examinations of all nationally recognized credit rating agencies and make reports of its findings publicly available. Credit rating agencies will be subject to new disclosure requirements that mandate public disclosure of ratings methodologies, use of third parties’ due diligence and ratings track records, as well as material changes made to, or material errors identified in, ratings procedures or methodologies. The Act authorizes the SEC to penalize nationally recognized credit rating agencies for failing to consistently produce accurate ratings and establishes a new private right of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source.
The conference committee removed a provision in the Senate version of the bill that would have required the establishment of a new self-regulatory organization charged with assigning the task of providing initial credit ratings for certain structured finance products to qualified credit rating agencies. The Act instead requires the SEC to undertake a two-year study for the purpose of determining an independent method for matching credit ratings agencies with issuers, so as to mitigate conflicts of interest in the selection process for ratings of structured finance products.
In an effort to curb reliance on credit ratings, the Act mandates that references to credit ratings be removed from certain statutes and that the SEC conduct studies on, among other things, the standardization of credit ratings.
In a late addition by the conference committee, the Act includes a provision that nullifies Rule 436(g) under the Securities Act of 1933 (the “Securities Act”), which currently exempts nationally recognized credit rating agencies from the requirements under the Securities Act that apply to experts and, importantly, exempts credit rating agencies from Section 11 liability when ratings are included in Securities Act registration statements. The rescission of Rule 436(g) will mean that the rating agencies must provide written consent before their ratings can be included in registration statements. This will have an immediate impact in the context of registered structured finance issuances, which rely directly on credit ratings, and it may take on even greater importance if the SEC promulgates rules requiring the inclusion of ratings disclosure in the registration statements of corporate debt issuers.
August 8, 2011 at 2:17 PM #716875briansd1Guest[quote=jstoesz][quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.[/quote]
jstoesz, the Dodd-Frank bill forces the ratings agencies to be more transparent. The ratings agencies are now less likely to give AAA ratings to junk mortgage securities.
Credit Rating Agency Regulation
The Act directs the SEC to establish a new Office of Credit Ratings to oversee and examine credit rating agencies and promulgate new rules for internal controls, independence, transparency and penalties for poor performance. Nationally recognized credit rating agencies will be required to establish, maintain, enforce and document an effective internal control structure and submit an annual internal controls report to the SEC. The Office of Credit Ratings will be required to conduct at least annual examinations of all nationally recognized credit rating agencies and make reports of its findings publicly available. Credit rating agencies will be subject to new disclosure requirements that mandate public disclosure of ratings methodologies, use of third parties’ due diligence and ratings track records, as well as material changes made to, or material errors identified in, ratings procedures or methodologies. The Act authorizes the SEC to penalize nationally recognized credit rating agencies for failing to consistently produce accurate ratings and establishes a new private right of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source.
The conference committee removed a provision in the Senate version of the bill that would have required the establishment of a new self-regulatory organization charged with assigning the task of providing initial credit ratings for certain structured finance products to qualified credit rating agencies. The Act instead requires the SEC to undertake a two-year study for the purpose of determining an independent method for matching credit ratings agencies with issuers, so as to mitigate conflicts of interest in the selection process for ratings of structured finance products.
In an effort to curb reliance on credit ratings, the Act mandates that references to credit ratings be removed from certain statutes and that the SEC conduct studies on, among other things, the standardization of credit ratings.
In a late addition by the conference committee, the Act includes a provision that nullifies Rule 436(g) under the Securities Act of 1933 (the “Securities Act”), which currently exempts nationally recognized credit rating agencies from the requirements under the Securities Act that apply to experts and, importantly, exempts credit rating agencies from Section 11 liability when ratings are included in Securities Act registration statements. The rescission of Rule 436(g) will mean that the rating agencies must provide written consent before their ratings can be included in registration statements. This will have an immediate impact in the context of registered structured finance issuances, which rely directly on credit ratings, and it may take on even greater importance if the SEC promulgates rules requiring the inclusion of ratings disclosure in the registration statements of corporate debt issuers.
August 8, 2011 at 2:17 PM #717026briansd1Guest[quote=jstoesz][quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.[/quote]
jstoesz, the Dodd-Frank bill forces the ratings agencies to be more transparent. The ratings agencies are now less likely to give AAA ratings to junk mortgage securities.
Credit Rating Agency Regulation
The Act directs the SEC to establish a new Office of Credit Ratings to oversee and examine credit rating agencies and promulgate new rules for internal controls, independence, transparency and penalties for poor performance. Nationally recognized credit rating agencies will be required to establish, maintain, enforce and document an effective internal control structure and submit an annual internal controls report to the SEC. The Office of Credit Ratings will be required to conduct at least annual examinations of all nationally recognized credit rating agencies and make reports of its findings publicly available. Credit rating agencies will be subject to new disclosure requirements that mandate public disclosure of ratings methodologies, use of third parties’ due diligence and ratings track records, as well as material changes made to, or material errors identified in, ratings procedures or methodologies. The Act authorizes the SEC to penalize nationally recognized credit rating agencies for failing to consistently produce accurate ratings and establishes a new private right of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source.
The conference committee removed a provision in the Senate version of the bill that would have required the establishment of a new self-regulatory organization charged with assigning the task of providing initial credit ratings for certain structured finance products to qualified credit rating agencies. The Act instead requires the SEC to undertake a two-year study for the purpose of determining an independent method for matching credit ratings agencies with issuers, so as to mitigate conflicts of interest in the selection process for ratings of structured finance products.
In an effort to curb reliance on credit ratings, the Act mandates that references to credit ratings be removed from certain statutes and that the SEC conduct studies on, among other things, the standardization of credit ratings.
In a late addition by the conference committee, the Act includes a provision that nullifies Rule 436(g) under the Securities Act of 1933 (the “Securities Act”), which currently exempts nationally recognized credit rating agencies from the requirements under the Securities Act that apply to experts and, importantly, exempts credit rating agencies from Section 11 liability when ratings are included in Securities Act registration statements. The rescission of Rule 436(g) will mean that the rating agencies must provide written consent before their ratings can be included in registration statements. This will have an immediate impact in the context of registered structured finance issuances, which rely directly on credit ratings, and it may take on even greater importance if the SEC promulgates rules requiring the inclusion of ratings disclosure in the registration statements of corporate debt issuers.
August 8, 2011 at 2:17 PM #717383briansd1Guest[quote=jstoesz][quote=briansd1]
I do attach importance to what S&P has to say simply because the ratings have become an integral part of our financial system.Those who don’t give a damn about S&P should really stop pointing to the rating.
[/quote]Back to the whole fin reg bill. Why is it wrong to beat your opponent with the stick he gives you?
Seems logical to me, But I may be arguing in the alternative.[/quote]
jstoesz, the Dodd-Frank bill forces the ratings agencies to be more transparent. The ratings agencies are now less likely to give AAA ratings to junk mortgage securities.
Credit Rating Agency Regulation
The Act directs the SEC to establish a new Office of Credit Ratings to oversee and examine credit rating agencies and promulgate new rules for internal controls, independence, transparency and penalties for poor performance. Nationally recognized credit rating agencies will be required to establish, maintain, enforce and document an effective internal control structure and submit an annual internal controls report to the SEC. The Office of Credit Ratings will be required to conduct at least annual examinations of all nationally recognized credit rating agencies and make reports of its findings publicly available. Credit rating agencies will be subject to new disclosure requirements that mandate public disclosure of ratings methodologies, use of third parties’ due diligence and ratings track records, as well as material changes made to, or material errors identified in, ratings procedures or methodologies. The Act authorizes the SEC to penalize nationally recognized credit rating agencies for failing to consistently produce accurate ratings and establishes a new private right of action against rating agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts or to obtain analysis from an independent source.
The conference committee removed a provision in the Senate version of the bill that would have required the establishment of a new self-regulatory organization charged with assigning the task of providing initial credit ratings for certain structured finance products to qualified credit rating agencies. The Act instead requires the SEC to undertake a two-year study for the purpose of determining an independent method for matching credit ratings agencies with issuers, so as to mitigate conflicts of interest in the selection process for ratings of structured finance products.
In an effort to curb reliance on credit ratings, the Act mandates that references to credit ratings be removed from certain statutes and that the SEC conduct studies on, among other things, the standardization of credit ratings.
In a late addition by the conference committee, the Act includes a provision that nullifies Rule 436(g) under the Securities Act of 1933 (the “Securities Act”), which currently exempts nationally recognized credit rating agencies from the requirements under the Securities Act that apply to experts and, importantly, exempts credit rating agencies from Section 11 liability when ratings are included in Securities Act registration statements. The rescission of Rule 436(g) will mean that the rating agencies must provide written consent before their ratings can be included in registration statements. This will have an immediate impact in the context of registered structured finance issuances, which rely directly on credit ratings, and it may take on even greater importance if the SEC promulgates rules requiring the inclusion of ratings disclosure in the registration statements of corporate debt issuers.
August 8, 2011 at 2:18 PM #716165briansd1Guest[quote=jstoesz]
Again false…doesn’t france get a new government every twenty years? Who knows what will happen there.
http://en.wikipedia.org/wiki/Politics_of_France
[/quote]
jsotoez, I’m not saying that France is more stable than we are.
Based on the S&P ratings, S&P is implying that France is more stable (based on their 5 criteria) and more likely to pay back their sovereign debts.
You and I may not agree with S&P, but their rationale is what it is.
August 8, 2011 at 2:18 PM #716256briansd1Guest[quote=jstoesz]
Again false…doesn’t france get a new government every twenty years? Who knows what will happen there.
http://en.wikipedia.org/wiki/Politics_of_France
[/quote]
jsotoez, I’m not saying that France is more stable than we are.
Based on the S&P ratings, S&P is implying that France is more stable (based on their 5 criteria) and more likely to pay back their sovereign debts.
You and I may not agree with S&P, but their rationale is what it is.
August 8, 2011 at 2:18 PM #716855briansd1Guest[quote=jstoesz]
Again false…doesn’t france get a new government every twenty years? Who knows what will happen there.
http://en.wikipedia.org/wiki/Politics_of_France
[/quote]
jsotoez, I’m not saying that France is more stable than we are.
Based on the S&P ratings, S&P is implying that France is more stable (based on their 5 criteria) and more likely to pay back their sovereign debts.
You and I may not agree with S&P, but their rationale is what it is.
August 8, 2011 at 2:18 PM #717006briansd1Guest[quote=jstoesz]
Again false…doesn’t france get a new government every twenty years? Who knows what will happen there.
http://en.wikipedia.org/wiki/Politics_of_France
[/quote]
jsotoez, I’m not saying that France is more stable than we are.
Based on the S&P ratings, S&P is implying that France is more stable (based on their 5 criteria) and more likely to pay back their sovereign debts.
You and I may not agree with S&P, but their rationale is what it is.
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