Too little, way too late:
"Under fire for the high ratings they awarded to subprime mortgage securities, three large credit rating firms are close to announcing a broad deal with the New York attorney general to reform some of their core business practices, according to people briefed on the investigation.
Most significantly, the rating firms are considering changing how they charge fees for ratings to make it harder for investment banks to play the firms against one another to obtain a better rating, these people say, adding that negotiations are ongoing and the deal could still fall apart.
As part of the deal being discussed, the firms — Standard & Poor’s, Moody’s Investors Service and Fitch Ratings — would also aid Attorney General Andrew M. Cuomo’s broader investigation into how Wall Street packaged mortgages into securities, in exchange for immunity from prosecution. And the rating agencies will establish new standards for how investment banks review mortgage loans . . .
Under the proposed deal with Mr. Cuomo, a rating agency would charge fees in stages for various analytical tasks — not just the rating, which acts as a sort of grade for investors. They will also disclose every three months all deals that they were asked to rate and all the deals they end up rating, providing investors more information than is now available."
What a limp, pathetic deal. It almost makes you miss former Attorney General Eliot Spitzer . . .
Rating Firms Seem Near Legal Deal on Reforms
JENNY ANDERSON and VIKAS BAJAJ
NYT, June 4, 2008
S&P Slashes Ratings of Big Banks