Credit Rating Agencies to Face Curbs

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The Senate has approved by a 64–35 margin a provision establishing a credit-rating board, which will oversee the rating of complex bond deals and help to remove some of the conflicts of interest, creating some distance between bond issuers and rating agencies. Right now, the bond issuers can pick their rating agencies, a system that has been blamed for the inflated ratings that brought about the financial crisis. Meanwhile, subpoenas were issued today in New York attorney general Andrew Cuomo’s inquiry into whether banks and rating agencies misrepresented mortgage securities to increase their ratings. [WSJ]