SEC to wean markets off credit ratingsI happen to be one of those people that think that the credit ratings agencies were enormously culpable in the financial debacle of 2008. That's why I was very disappointed that the financial regulatory reform passed last year did so little to address that particular problem. So moves like this that weaken the deeply institutionalized authority of the ratings agencies are probably on the right track.
(Reuters) - U.S. securities regulators moved to scale back markets' reliance on credit rating agencies, after the financial crisis laid bare the industry's shortcomings.
The Securities and Exchange Commission voted 5-0 on Wednesday to propose that several of its key documents for securities offerings no longer include ratings references designed to give investors confidence in the quality of the securities.
(They're not even very good at what is supposed to be their core competency... a topic I think I'll delve into for a future post...)