Proposals would improve independence, disclosure and would highlight the risks of structured products.
The Securities and Exchange Commission moved on two fronts to reform the embattled credit rating agencies — aiming to fix conflicts of interest in the industry, and to distinguish between different types of asset-backed securities.
Twin proposed new rules come as the rating companies have taken major blame for the magnitude of the subprime mortgage crisis and resulting credit crunch. Critics contend that the agencies overrated securities backed by bad loans, leading investors to take on more risk than they could handle.
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