R&R has 8 out of the 10 required letters for NRSRO designation. The Office of Credit Ratings (OCR) at the SEC only considers one valid. A key area of disagreement is whether our valuations, calculated directly from our ratings, deserve to be considered "nationally recognized...

Widespread confusion appears to exist among the investing public as to the potential distinction between ratings and valuations. Are they the same? If not, how exactly are they different, and is one more “useful” than the other as a financial measure? Even the SEC is now confused, something quite surprising in light of the fact that they are supposedly regulating rating agencies. Given the importance of this practical distinction, it’s worth spending a few minutes dispelling rumors, lies and innuendos. At a fundamental level, both ideas are identical and the issue of their supposed kinship or difference makes no sense at all. It is equivalent to asking about the difference between degrees Fahrenheit and degrees Centigrade: both are temperature-measurement systems. The only difference is that one system is used in America while the other one is used in Europe and elsewhere. (Should we call this “l’exception Américaine?”) If someone now living in Paris suddenly woke up in New York, confusion would reign only until he learned the new system, which would take less than a day, or even faster if he headed to the beach when the thermometer read “30 degrees.” The point is that a self-consistent system is always usable but only makes sense within its own context. No harm will be done by using either system as long as it is used appropriately. Since a simple transformation function exists between them, any confusion on the part of a user can be cleared up immediately with a mapping function.

The New York Times interviews R&R Consulting principal Ann Rutledge about the Security and Exchange Commission's proposal to tighten rules as a means of restoring trust to the asset-backed securities market. Read her assessment of the prospects for meaningful reform in Gretchen Morgenson's September 4...

"Sylvain Raynes is a principal with R&R Consulting, which values structured security deals. He says if the agencies don't change their ratings often, it'll be a sign something funny is happening. 'If you see the ratings are not moving at all and yet you, by...

"If everybody is playing by the same set of rules, whether you are talking about loan origination or securitization, then it becomes very hard to game the system. The lack of definitions is a huge problem… If the Congress, the SEC and the FASB, and...

Recently the Financial Economists Roundtable (FER) posted a summary of their thinking in July 2008 on Reforming the Role of Statistical Rating Organizations [SROs] in the Securitization Process. The FER is a group of senior financial economists who advance the study of finance and frame...

The Securities and Exchange Commission's long-awaited new rules for bond rating agencies will do little to alter the practices that helped lead to the financial crisis, experts claimed…. "The market has barely taken note of the SEC action because its impact is so limited," said...

What do you make of the provisions (draft bailout bill 132, 133) authorizing the SEC to suspend mark-to-market (MTM)? Do you think they will exercise this authority? What’s the buzz on the Street? Would suspension just create more confusion and uncertainty?Also, a study of mtm...

The high road of securitization is forward-looking. It promotes economic growth and rewards superior asset quality. Securitization is alive and doing well in grass-roots economies. But maybe you have not come to our blog to read about the high road of securitization. Maybe you have...