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House and Senate Negotiators to Debate Franken Amendment and Rating-Agency...
As anticipated, the Franken Amendment is a battleground in the House-Senate conference on the financial regulation bill, as the Wall Street Journal reports (subscription required). It’s interesting...
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S&P Defends Rating Quality
S&P publishes a letter to the NYT defending its ratings, other than those on “U.S. mortgage securities” (a term that presumably is meant to include CDOs as well as mortgage-backed securities). I...
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Franken Proposal to Be Deferred to SEC Study
So the conference committee killed the Franken Amendment. Or, more specifically, they instructed the SEC to study the concept of using an independent board to assign raters and report to Congress. I...
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Judge Kaplan: Agencies Not Liable Unless Rating Opinion “Not Truly Held”
Judge Lewis Kaplan of the Southern District of New York rejected another securities action against the rating agencies in an opinion dated yesterday, In re IndyMac Mortgage-Backed Securities Litig.,...
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Grundfest: Chances of Franken-Style Rating Agency Board Almost Zero
Joseph Grundfest today put at “almost zero” the chance that the Commission ultimately would adopt a Franken-Amendment-style third-party board to assign the agencies to give initial ratings. Grundfest...
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Conference Text on Rating Agencies
The conference report on the financial-reform bill, now called the Dodd-Frank Wall Street Reform and Consumer Protection Act is up (click “Dodd-Frank Conference Report”). The rating-agency portion is...
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Elimination of All Federal Rating-Dependent Regulation in One Year?
The struggle over rating-dependent regulation — often discussed in the academic literature — has been largely eclipsed in the discussion of the financial-regulation bill. But it’s been quite a tussle....
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Is Congress Introducing New Rating-Dependent Regulation?
So Blanche Lincoln’s eleventh-hour introduction of a provision that would have required the banks to spin off their swaps desks into separate affiliates may just have been what allowed her to beat back...
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FDIC to Propose Alternatives to Ratings for Bank Capital
The Wall Street Journal (subscription required) reports that regulators are getting ready to start evaluating alternatives to credit ratings for bank capital regulation. The FDIC will present and...
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US Banking Regulators Propose Ratings-Free Capital Rules
The US federal banking regulators (Fed, OCC, and FDIC) yesterday proposed rules that apparently would remove ratings from capital regulation for large banks. This comes a few months after the deadline...
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