Lawmakers on Thursday made two key changes to legislation making its way through the Senate. Under one amendment proposed by Sen. Al Franken, D-Minn., a new government board would decide which credit rating agencies would rate mortgage-backed and other “structured” securities. That would make it harder for credit rating agencies and bond issuers to collude in prettifying risky assets, such as subprime loans. The measure also aims to discourage companies from playing the three main ratings firms — Fitch, Moody’s (MCO) and Standard & Poor’s — off one another in order to elicit a better credit rating.
Crunch Time: Congress Has a Final Chance to Put Steel into Financial Reform | BNET Financial Services Blog | BNET