Sunday, July 16, 2006

The End of the Credit Rating Duopoly As We Know It?

It looks like Bucks County isn't just for coffee anymore....

Rep. Fitzpatrick from that district has recently passed Bill that "removes the Securities and Exchange Commission (SEC) from the process of approving certain rating agencies as nationally recognized statistical rating organizations".

I'm really curious to see what the impact of this will be on CDS spreads and the overall CDS market in general. Hull has done some interesting research of rating agency events on spreads. I'm also curious to see the impact of this on Basel II, because the BIS clearly pays close attention to rating agency event impact on credit.