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Al Franken wants credit rating reform

by The Big E on September 17, 2013 · 3 comments

trust me banker vs. franken

One of the factors leading to the 2008 economic collapse was how the companies that provided the credit ratings went about their business. Basically, if a bankster paid them, they got a good credit rating. And this applied to whatever financial product they were hocking.
Worthless derivative? Bundled garbage? If banksters paid, they got a good rating and their bundled, stinking **** smelled like a rose.
This problem has not been fixed.
Sen. Al Franken (DFL-MN) wants this fixed.

The Senate Permanent Subcommittee on Investigations recently revealed examples of Wall Street financial institutions negotiating higher ratings from credit rating agencies for its sub-par products. Of the AAA-rated subprime-mortgage-backed securities issued in 2006 alone, 93% have been downgraded to junk status.
Sen. Franken’s Restore Integrity to Credit Rating Amendment cleans up the credit rating system by making sure a bank or financial institution can’t shop around among credit rating agencies to get a product’s initial rating. The bipartisan proposal creates a board, overseen by the Securities and Exchange Commission, which will assign credit rating agencies to provide initial ratings in order to eliminate inherent conflicts of interest. Senator Franken’s proposal passed the Senate by a 64 to 35 vote, and the final bill passed into law requires that the SEC study the problem. If the SEC does not develop an alternative mechanism to address the conflicts of interest problem, Senator Franken’s proposal will go into effect.

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