A New Law for the Bond Rating Industry - For Better or for Worse?

13 Pages Posted: 7 Feb 2007

See all articles by Lawrence J. White

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics; Stern School of Business, New York University

Abstract

With little fanfare last September, President Bush signed the Credit Rating Agency Reform Act of 2006. This new legislation has the potential to change the way that the credit rating industry is regulated by the Securities and Exchange Commission. So as to provide a better understanding of the significance of the new law, this paper first provides a brief recounting of the bond rating industry's history and the SEC's haphazard regulation of this industry over the past 31 years. The paper then outlines the important provisions of the new act and comments on the possible routes that the SEC could follow in implementing it.

Keywords: Securities and Exchange Commission, entry regulation, bond rating industry, nationally recognized statistical rating organizations

JEL Classification: G18, K23, L59

Suggested Citation

White, Lawrence J. and White, Lawrence J., A New Law for the Bond Rating Industry - For Better or for Worse?. Regulation, Forthcoming, New York University Law and Economics Research Paper No. 07-09, Available at SSRN: https://ssrn.com/abstract=961391

Lawrence J. White (Contact Author)

Stern School of Business, New York University ( email )

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New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

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New York, NY NY 10012
United States

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