Rating the Rating Agencies

At its November 4th, 2019 meeting the SEC’s Fixed Income Market Structure Advisory Committee (FIMSAC) addressed the topic “Alternative Compensation Models for Credit Rating Agencies.” That discussion was the culmination of 15 years of attention to and evolution of the business of assessing the creditworthiness of bond issuers, but it is most assuredly not the last word on the subject. This TABB Group Market Note takes a hard look at the history of credit ratings, what the real problems are, and what solutions will or won't work.