Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

SEC’s Schapiro Tells Investors to Aid Credit-Rating Competition

Don't Miss Out —
Follow us on:

June 22 (Bloomberg) -- As regulators remove references to credit-rating firms from federal rules, institutional investors should also rethink how they use the ratings, U.S. Securities and Exchange Commission Chairman Mary Schapiro said.

“If your documents require a specific rating by a specific rating agency I urge you to revisit it,” Schapiro said today at a meeting of the American Securitization Forum in Washington. If investors can’t buy securities rated by new firms, she said, “how will more competition that may improve the quality of ratings develop?”

Last year’s Dodd-Frank Act required government agencies to rid their regulations of references to credit raters after the firms were accused of contributing to the 2008 credit crisis by giving top ratings to mortgage-linked bonds that later collapsed in value.

Schapiro also said that investors are waiting for reforms in the securitization market “before they are willing to wade back in.”

“Efforts to implement the reforms that would bring investors back to the markets are being met with strong and what I believe to be short-sighted resistance,” Schapiro said. “We should not weaken reform for short-term gain.”

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.