Right around this time, five years ago, what would eventually become the Dodd-Frank Wall Street Reform and Consumer Protection Act was making its way through Congress. A key provision in the bill was Title 9, subtitle C — Improvements to the Regulation of Credit Rating Agencies. Ratings agencies took a lot of the blame for the crisis, after they flat-out failed to rate risky bonds properly.
Dodd Frank was supposed to change things for the better, but five years later, things remain very much the same, with the big three agencies even stronger. Fitch, Moody’s and S&P, still account for more than 95 percent of all ratings.
The ratings agencies paid a fraction of the fines of the big banks, and their conflicts of of interest remain: namely that they get paid by the companies they rate.
Marketplace’s Kai Ryssdal spoke with Tim Martin of the Wall Street Journal about what’s going on in the world of credit ratings, and whether there may be any meaningful alternatives in the future.
Listen to the full interview in the player above.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.