S&P, Moody's bid for credibility

Among the companies most damaged by the credit meltdown: credit rating agencies. They were pilloried by investors, government officials and everyone in between. They were portrayed as greedy, serve-our-clients-at-all-costs bums and it really shattered their reputations, even if they had some good points about what credit ratings are all about. They may have been misunderstood but it was their own fault they let the perception win the day. So this is a crisis of PR as well as actual substance. To address this, Standard & Poor's and Moody's have come out with a host of new procedures. One S&P move: it will include "what if" scenarios in its ratings reports statements that explain the assumptions behind its ratings and alternative scenarios, the AP reports. More details about liquidity and volatility will be added. The danger is that it all reads like boilerplate. But any progress is welcome. Unsurprisingly, critics are not impressed.  

For more:
- here's the AP article
- here's a New York Times article about the tepid reaction