Letters to the Editor
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
‘Subpar Ratings For the Rating Agencies’
In her January 17 column, Liz Peek questioned the integrity and transparency of the rating agencies and the quality of our ratings opinions [Business, “Subpar Ratings For the Rating Agencies,” January 17, 2008].
Ms. Peek’s column illustrates that a fundamental misunderstanding exists, among some, about the way we do business and about the value our business model brings to market participants.
Some points to consider:
— The issuer-pays business model enables us to make our ratings available to the public in real time, free of charge. No other model provides such transparency.
— We have rigorous policies in place to support the independence of our ratings, including separating our analytical and commercial activities, having all ratings assigned by committees, and structuring analysts’ compensation so it is not dependent upon fees related to the ratings they assign.
— Our ratings criteria are publicly available and consistently applied, and we refuse to rate transactions that do not meet our criteria.
— Contrary to the assertion made by John Coffee in the column, we conduct ongoing surveillance of the securities we rate. When the credit performance of underlying collateral pools diverges significantly from our original assumptions, we take action. We have an excellent long-term record of assessing creditworthiness, which speaks to the integrity of our processes and the expertise of our people.
The efficient and effective functioning of global credit markets is essential to the well-being of the world economy. We have learned a great deal from recent challenges facing these markets, and we are developing a broad array of new actions to further strengthen the ratings process and better serve the markets.
VICKIE TILLMAN
Executive Vice President
Credit Market Services
Standard & Poor’s
New York, N.Y.
Please address letters intended for publication to the Editor of The New York Sun. Letters may be sent by e-mail to editor@nysun.com, by facsimile to 212-608-7348, or post to 105 Chambers Street, New York City 10007. Please include a return address and daytime telephone number. Letters may be edited.
