Ex-Rated Agencies 0
The ratings agencies told investors that all those hinky CDOs and mortgage-backed insecurities were A-double-OK. They were complicit in Wall Street’s successfully convincing investors to buy bags of air.
That house needs to be cleaned, but the House of Representatives is considering eliminating the Franken amendment:
Franken is seeking to limit conflicts in the existing system, where an institution pays for its rating, and at times, shops for the best rating it can get for the lowest price.
However, late Monday, House leaders, including House Financial Services Committee Chairman Barney Frank, Democrat from Massachusetts, put together an offer to the Senate that would strike that measure and replace it with a House provision that would have the SEC conduct a one-year study to evaluate whether such a board would work and present to Congress recommendations for regulatory or statutory change.
“Long-term studies” and “blue ribbon commissions” are where legislative proposals are sent to die.
My letter to my elected representatives incongruously assembled goes out today.
