Reforming Rating Agencies 
Rating agencies had a starring role in the recent financial crisis. They failed in their core mission, which is to provide accurate assessments of the creditworthiness of securities and to revise those estimates when events warrant. The most egregious failures affected mortgage backed derivatives where investment grade ratings were given to securities without justification. Moreover, the agencies were slow in revising the ratings, often waiting until the inflated nature of the ratings was painfully apparent. Performance in their more traditional business was equally poor. In one of the more publicized corporate rating fiascos Lehman was rated above minimum investment grade until it filed for bankruptcy. Unfortunately this is not an isolated example.
In this paper Ben Wolkowitz identifies the causes and the solutions for reforming the credit rating industry. To learn more, click here to download the white paper.
About the author
 |
Ben Wolkowitz Ben Wolkowitz’s career has been focused on finance and economics. He started out as an Assistant Professor at Tulane University where he taught economics and was a consultant with The Urban Institute. Deciding to get more involved in policy work he joined the Research Division of the Federal Reserve Board where he became a Section Chief in Financial Studies. Ben headed an interagency task force (Federal Reserve, OCC and FDIC) charged with drafting regulations governing the bank use of financial futures. He was at the New York Futures Exchange and Citigroup before joining Morgan Stanley where he was a Managing Director in the Fixed Income Division. Retiring in 2000 he set up a consulting company, Madison Financial Technology Partners. In that capacity he became a Senior Advisor to Headstrong, a position he holds currently. |