- Reform Must Focus on Competition, Conflicts of Interest -
FLORHAM PARK, N.J., March 7 /PRNewswire/ --
WHAT: Financial Executives International CEO and President, Colleen
Cunningham, will testify today before the U.S. Senate Committee on
Banking, Housing and Urban Affairs at their hearing to assess the
current oversight and operation of credit rating agencies. Full
testimony is available upon request, and highlights are included
below.
WHEN: Tuesday, March 7, 2006
10:00 a.m.
WHERE: 538 Dirksen Senate Office Building
HIGHLIGHTS:
While FEI recognizes the vital role that credit rating agencies play in
the U.S. and world financial markets, FEI believes that Congress should pursue
credit rating agency reforms. FEI testimony will address concerns that have
been raised about credit rating agencies, especially as they relate to
Nationally Recognized Statistical Rating Organizations (NRSROs), in the three
following areas:
* Competition:
* With more than 100 credit rating agencies worldwide, but only 5 that
are designated NRSROs, there is a need for increased competition.
* FEI will discuss the elimination of the current "no action" process
for recognizing NRSROs, and the introduction of clear registration
requirements as a means to increasing the number of players in the
market.
* Accountability:
* FEI will discuss the need for regular performance audits and increased
transparency through greater disclosure of agency policies and
procedures.
* Conflicts of Interest:
* The current system permits rating agencies to offer both rating
services and fee-based consulting services to the same issuer,
creating a clear conflict of interest.
* FEI will discuss how establishing a bright-line rule can mitigate this
problem without prohibiting preliminary ratings assessments.
FEI believes that Congress should pass legislation this year which would
address the problems discussed above, and vest the SEC with the necessary
authority to oversee the credit rating agencies going forward.
CONTACT: To obtain a copy of the full testimony or to arrange an
interview with FEI, please contact Kristen Crofoot on behalf of FEI at
(212) 850-5692 or kcrofoot@fd-us.com.
SOURCE Financial Executives International
 back to top
Related links:
http://www.fei.org
Company News On-Call:
http://www.prnewswire.com/comp/310650.html
CONTACT:
Kristen Crofoot, +1-212-850-5692, or
kcrofoot@fd-us.com, for Financial Executives International
|
