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Showing posts with the label State of California

Rating Agency Reform

Recently, California State Treasurer Bill Lockyer "has been leading a national effort to persuade the rating agencies to change the way they rate municipal bonds. Munis are held to a much higher standard than corporate bonds, as the rating agencies' own default studies demonstrate. This unjustifiable system has cost taxpayers billions of dollars." This "also helped trigger (a) meltdown..when several (municipal) bond insurers suffered downgrades below the minimum ratings required for money market eligibility." See: States and Cities Start Rebelling on Bond Ratings.
Also see:
http://www.sec.gov/rules/proposed/s70405/wcunningham9442.pdf

"Three weeks ago, the Treasurer took the lead in writing a letter to the rating agencies requesting that they change the way they rate municipal bonds. The letter was signed or endorsed by 13 state treasurers, as well as four other state and local municipal issuers across the country." Other institutional investors..or …