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S&P launches new ratings site
by Gabriel Lacroix | Sunday, 26 April 2009
Following widespread condemnation of credit ratings agencies for their failure to predict some high profile financial collapses, Standard & Poor's has published a website and paper on what credit ratings are and are not, and the different business models and methodologies used by the various agencies.
The website, AboutCreditRatings.com, provides an interactive guide to credit ratings including information on how credit rating agencies are paid for their services, the ratings process, rating definitions, and ratings behaviour and performance. There is also a paper, Guide to Credit Ratings Essentials, which provides an overview of different business models and methodologies used by credit rating agencies, and points out key things investors should know about credit ratings.
S&P Managing Director Pacific, John Bailey, said S&P has published the Guide to provide the market with important information about ratings and their role in the markets. "We believe the value of our ratings is enhanced when people know how we arrived at our ratings, and how they have performed over time. The Guide explains what credit ratings are, and are not, who uses them and how they may be useful to the financial markets," Bailey said.
"Publishing this Guide is one of a number of initiatives we have put in place to help restore investor confidence, and enhance transparency. Another recent initiative is the appointment of an independent Ombudsman," he added.
"More broadly, we have increased the amount of information we publish about the assumptions and stress tests we use in arriving at ratings in a variety of sectors," he concluded.
� 2009 financialalert Limited.
First published in financialalert www.financialalert.co.nz