A New Law for the Bond Rating Industry
5 Pages Posted: 9 Apr 2007
With little fanfare last September, President Bush signed the Credit Rating Agency Reform Act of 2006, in an effort to open what had been a murky, government-sanctioned cartel of bond-rating firms. An optimist could argue that new law will make rater certification more transparent and open the business up to new competitors. A pessimist would respond that the law still gives tremendous power to government-ordained bond raters. Only the passage of time will tell who is correct.
Keywords: Lawrence J. White, A New Law for the Bond Rating Industry, Credit Rating Agency Reform Act, rater certification, transparency, bonds, SEC, securities and investment, NRSRO designation system, ENRON, Sarbanes-Oxley, regulation,
JEL Classification: E42, E43, E49, E62, E66, G28
Suggested Citation: Suggested Citation