Tavakoli
Structured Finance Revokes the Credit Rating Agencies’ NRSRO
Designation (PDF)
Issues and Solutions for Restoring Credibility to the Credit
Rating Agencies and Rehabilitating the Alternative Banking
System
TSF - July
26, 2011
by Janet Tavakoli
JT Note: I may have embarrassed S&P into downgrading the
USA, although one notch is not enough (see report). Earlier I
heard
through
the grapevine that Standard & Poor’s declined to rate
(after initially agreeing to rate) a
Goldman/Citigroup CMBS deal as a direct result
of my final release (earlier, I sent investors a draft for comments.).
Among my
recommendations is that rating “agencies” should
be separate entities for which ratings accuracy is the only measure
of success. McGraw Hill initiated talks of spinning off Standard & Poor’s,
which accounts for a quarter of McGraw Hill's profits. It may
be a spin off at the peak of S&P’s value.
I also address
the lack of ability of the credit rating agencies to evaluate
the
USA’s “AAA” rating.
Janet Tavakoli is the president
of Tavakoli Structured Finance, a Chicago-based firm that provides
consulting to financial institutions
and institutional investors. Ms. Tavakoli has more than 20 years
of experience in senior investment banking positions, trading,
structuring and marketing structured financial products. She
is a former adjunct
professor of derivatives at the University of Chicago's Graduate
School of Business. She is the author of: Credit
Derivatives & Synthetic
Structures (John Wiley & Sons, 1998, 2001), Structured
Finance & Collateralized
Debt Obligations (John Wiley & Sons, 2008).
Janet Tavakoli's book on the global financial
meltdown is Dear
Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (Wiley
2009).
Clients of Tavakoli Structured Finance have the benefit
of proprietary consultation, which is not available in
any other paid or public
forum. Clients also commission proprietary research and analysis.
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