Economic Consequences Of Proposed Changes In NRSRO Regulation
The financial crisis of 2007-09 has generated considerable consternation about distorted incentives on the part of key players in the financial market, and the extent to which these contributed to the crisis. Indeed, there are some who believe that the crisis was in many ways a credit rating crisis. Financial securities emerging from securitization, such as mortgage-backed securities, represented over $11 trillion worth of outstanding U.S. debt. The majority of these securities were highly rated. In 2007 and 2008, the creditworthiness of structured finance securities experienced unprecedented deterioration, and many of these securities were downgraded.