Advanced Search

Volume 2014 - Number 28

July 18, 2014

Single, Numerical Scale Suggested as the Fix For Structured Finance Transaction Ratings

As the Securities and Exchange Commission continues to consider how to reform the rating process for structured finance transactions, including non-agency MBS, industry analysts affiliated with the Brookings Institution suggested that the fix doesn’t require altering the issuer-pay model that has been in place for more than 40 years. Instead, the SEC should help establish transparent, numerical benchmarks, according to two industry participants, shifting away from the current system of letter-based ratings that are also used for corporate debt and sovereign debt. Ann Rutledge, a founding principal at R&R Consulting, a credit rating service, and Robert Litan, a nonresident senior fellow at The Brookings Institution, detailed their proposal in an economic study recently published by Brookings. “Securities that are rated only in an ordinal fashion – in order of likelihood of default – can be...

Subscribers to Inside MBS & ABS have full access to all its stories and data online. Visitors may become subscribers for full access or may purchase individual articles and data.

Subscriber Log In

If you are a current subscriber or already purchased this article, please login below.

Forgot your password?

Already subscribe but haven't registered for all the benefits of the website?

Subscribe

This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.

 

Pay-Per-View

You can purchase this article for $55.00 without subscribing and always have access to it on insidemortgagefinance.com.

Pay Per View

Please contact Customer Service if you need assistance: 1-800-570-5744

Poll

The year is almost 75% done. How is mortgage origination volume at your shop?

We will fund about the same as we did in 2016.
We will fund more than last year – by a little.
We will fund more than last year – by a lot.
We will fund less than last year – by a little.
We will fund less than last year – by a lot.

vote to see results