The SEC plans to propose new rules that would be aimed at enhancing disclosure, comparability as well as provide more detailed information on the processes and methodologies behind the credit ratings. These rules would also add reporting requirements and address conflicts of interest that may arise in the structured products rating process.
According to the Wall Street Journal, the SEC will propose new rules that may 'diminish the importance of credit ratings in determining the amount of capital that investment banks are required to hold'. Floyd Norris of the New York Times, says that credit rating agencies are being made the scapegoats in a crisis that seems to have no end to it. Besides rating agencies, weak regulations that let borrowers with poor credit history borrow money are also to blame.
While that may be true, lets not forget Moody's credit rating 'computer glitches' reported by the Financial Times a few weeks back followed by a 'confession' by S&P reporting its own rating 'glitch'.