Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: C.N.S. who wrote (25041)	1/20/2005 1:20:41 PM
From: russwinter	Respond to of 110194

Sleazy padding of Boyz wallets du jour: Company News Senate panel plans credit rating agencies hearing Wed Jan 19, 2005 01:02 PM ET WASHINGTON, Jan 19 (Reuters) - The U.S. Senate Banking Committee plans to hold a hearing as early as next month on possible conflicts of interest in the credit rating agency industry, said the committee's chairman on Wednesday. The panel will look into how credit raters work, "how they rate securities, are there any conflicts of interest," Alabama Republican Sen. Richard Shelby told reporters at a press conference spelling out the committee's 2005 priorities. The committee, which oversees the Securities and Exchange Commission, will also look at the SEC's system for officially recognizing some credit raters, but not others, said Shelby. The ratings industry is dominated by Standard & Poor's Ratings Services, a unit of McGraw-Hill Cos. Inc. (MHP.N: Quote, Profile, Research) , Moody's Corp.'s (MCO.N: Quote, Profile, Research) Moody's Investors Service, and Fitch Ratings, owned by France's Fimalac SA (LBCP.PA: Quote, Profile, Research) . The world's debt markets rely on credit-worthiness opinions on government and corporate borrowers put out by the big three raters, plus some mid-sized and smaller firms, including Canada's Dominion Bond Rating Service Ltd. A group of corporate treasurers and chief financial officers in October issued a survey showing more than half its members want more government oversight of credit raters. The Association for Financial Professionals said one-third of its members believe ratings of their companies are inaccurate. Credit raters, which are only loosely regulated by the SEC, have been criticized recently in Europe and North America. In Germany in early 2003, S&P hurt the stocks of some large companies by asking tough questions about pension liabilities. In America, raters came under scrutiny after the Enron Corp. scandal of 2001 for not lowering Enron's ratings earlier. Hoping to avert any crackdown, raters have made some internal changes on their own. Some lawmakers criticized the SEC this fall for not making more progress on reforming its oversight of credit raters. Some lawmakers have raised questions about the basic structure of the industry, in which borrowers pay credit raters for their opinions, as possibly posing conflicts of interest.