"Call to Downsize Giants of Ratings"
The Wall Street Journal writes "Call to Downsize Giants of Ratings". It says, "McGraw-Hill Cos.' S&P unit, Moody's Corp.'s Moody's Investors Service unit and Fitch Ratings, a unit of French company Fimalac SA, have about 2.7 million ratings on corporate, municipal, sovereign and other types of debt, according to securities filings. The seven other ratings firms overseen by the Securities and Exchange Commission have around 82,000 ratings. The three biggest credit-ratings firms have "been given a monopoly," Mohamed El-Erian, chief executive and co-chief investment officer of Pacific Investment Management Co., said in an interview last week, before S&P's downgrade. "Whether we like it or not, the rating agencies are hard-wired into the system." Criticism of the industry's dominance heightened following S&P's downgrade, especially after the company went ahead with the downgrade after U.S. officials said they noticed a $2 trillion error in S&P's calculations. The mess is fueling an unusual consensus among Democrats and Republicans that more competition might be needed in order to limit the impact of any single firm's ratings moves on financial markets." The Journal lists the 10 eligible NRSROs, or Nationally-Recognized Statistical Ratings Organizations, along with their date founded. They are: A.M. Best (1907), Moody's (1909), S&P (1923), Fitch (1927), DBRS (1976), Kroll Bond Rating Agency (1984), Japan Credit Rating Agency (1985), Rating and Investment Info (1986), Egan-Jones Ratings (1995), and Morningstar Credit Ratings (2001).
