The Securities and Exchange Commission designates certain credit rating agencies as “nationally recognized statistical ratings organizations” (NRSROs). It has been argued that this designation inhibits competition and has effectively created a government-sponsored cartel. Currently only two firms—Standard and Poor’s and Moody’s—represent about eighty percent of sector revenue. In an effort to increase competition and improve the quality of credit ratings, Congressman Michael G. Fitzpatrick (R-Pa.) has introduced HR 2990: The Credit Rating Agency Duopoly Relief Act of 2005, cosponsored by Financial Services Committee chairman Michael Oxley (R-Ohio), Capital Markets Subcommittee chairman Richard Baker (R-La.), Congressman Todd Akin (R-Mo.), Congressman Tom Feeney (R-Fla.), and Congressman Scott Garrett (R-N.J.).
Congressman Fitzpatrick will be joined by a panel of experts at this AEI event to discuss the state of the credit rating industry and how to improve it by fostering competition, transparency, and accountability. Discussants will include Floyd Abrams, outside counsel to Standard and Poor’s; Ted Frank of AEI; Jeanne Dering of Moody’s Corporation; and Lawrence White, professor at New York University.
