The Securities and Exchange Commission is about to adopt rules for ratings firms that were previously published for comment, but they will not address the agencies' internal compensation policies, which rewarded revenue production over rating accuracy. Nor will they go far enough to eliminate rating shopping, where the issuer hires the agencies that give it the highest ratings.
These were main drivers of the inaccurate ratings of securities backed by subprime mortgages.
Credit ratings have an extraordinarily broad effect on our financial...
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