R&R principal Sylvain Raynes calls for the government to take the lead in weaning the financial markets off their reliance on rating agencies. Reuters reports, “The Obama administration has said it wants markets to reduce their reliance on ratings after Moody’s Investors Service, Standard & Poor’s and Fitch Ratings created a false confidence in risky assets that in many cases defaulted. However, ‘it’s not possible to rely ‘less’ on rating agencies, you either rely on them 100 percent or you do not,’ said Sylvain Raynes, founding principal at R&R Consulting in New York, and former Moody’s analyst. ‘It cannot be done piecemeal, this is why the government needs to take charge,’ he said.” Raynes says the first step is for performance data for loans backing structured products, including collateralized debt obligations (CDOs), to be made publicly available for independent analysis.
Read the full article by Karen Brettell, “Help needed to reduce reliance on credit ratings,” Reuters, July 16, 2009.
