Despite all the e orts o the SEC there still much to do

It can no longer say that Americans ignore the question o the responsibility o rating agencies. Under the impetus o the new President o the Securities and Exchange Commission (SEC), Mary Schapiro, the major players in the sector met yesterday in Washington, to explore the re orm o the pay system agencies and the possible establishment o a Go ernment rating agency. I jurist Elizabeth Warren (Har ard), charged by the Congress in No ember to super ise the conduct o the inancial rescue plan (Trouble Asset Relie Program), ardently supports the creation o a ederal agency, the President o the SEC also raised the possibility o recourse to an independent adjudicator.

"Despite all the e orts o the SEC, there still much to do." "The status quo is simply not satis actory", acknowledged yesterday Mary Schapiro. "The role o credit rating agencies must be completely re ised i we are to promote the protection o in estors and the integrity o the market and restore con idence in our inancial system," said the SEC Chair, appointed by Barack Obama at the beginning o the year. Among the measures en isaged, Mary Schapiro suggested to explore ways to reduce the control o the market o the marking by the three main agencies (Standard & Poor's, Moody's and itch) and the need to ask the Congress to pro ide the SEC with new powers o super ision o the pri ate agencies.

Pro isions anti raud

In the centre o discussions: the system o remuneration o the agencies by issuers pre ailing since the 1970s. With the de iations obser ed on the market o structured products (CDO, CDS), with about 64.000 inancial instruments awarded the highest mark (against a dozen companies only early 2008) through "bubble" collapse, this model o compensation by the transmitter is since questioned. On the e e o the Washington meeting, the Council o Institutional In estors (CII) published a white paper calling or a strengthened control o rating agencies accused "o ha ing uelled the crisis o credit by ailing to take measures to ensure the alidity o their ratings on structured inancial products". In particular, ITC proposes the creation o a new organization o e ecti e super ision o agencies, or the strengthening o the powers o the SEC, to obtain greater transparency and reduce the impact o the ratings. It also o ers to remo e the regime o immunity enjoyed by agencies under the Securities Act o 1933 in terms o responsibility by submitting to the common law o pro isions anti raud scheme.

isiting New York, the President o Co ace, rançois Da id, recently denounced the "con lict o interest scandal" o rating agencies U.S. related to their remuneration system, arguing or the establishment o an alternati e European model. or its part, the CEO o Goldman Sachs, Lloyd Blank ein, itsel criticized the tendency o certain inancial institutions to "outsource their control o risk" in to relying on rating agencies. Despite the support o Elizabeth Warren and the President o the banking commission o the Senate, Christopher Dodd, the idea o the creation o a go ernment agency, unded by a le y imposed on listed companies, aces the reluctance irms on Wall Street and some experts more a ourable to a model agency controlled by in estors.