FINANCIAL REFORM

Oversight for Credit Rating Agencies

Wall Street is about to get a bit less cozy. In a 64-35 vote, the Senate approved a provision that will put some much needed space between bond issuers and rating agencies, by establishing a credit-rating board that would defuse some of the conflicts of interest. The current model, in which bond issuers choose their ratings agencies, has been faulted for the inflated ratings that led to the financial crisis. The measure is included in the financial-reform package that is slowly making its way through Congress. Even if the bill finds opposition, it will be tough to bring down with more than 60 votes backing it. Meanwhile, New York Attorney General Andrew Cuomo is investigating whether large banks and rating agencies misrepresented mortgage securities to bump up their ratings, and subpoenas were issued on Thursday.