Some radical ideas for credit rating agency reform

Moody's, Standard & Poor's and Fitch are all bent on showing the world that they are serious about reforms. Critics, of course, are unfazed by their steps so far. To them, none seem to be addressing the most obvious flaw in the system: the conflict of interest. Companies pay for ratings on their own bonds. There's always a huge incentive to please your customers. The Financial Times floats some ideas. One idea would be for issuers to pay into an independently managed pool, which would then assign a rating agency, thus breaking the commercial incentive to rate bonds high. Another idea would be for investors to pay for ratings. Interesting.

For more:
- here's the Financial Times article