Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, December 20, 2010

SEC Requests Public Comment on Standardizing Credit Ratings Terminology

The SEC is requesting public comment to help inform its study pursuant to Section 939(h) of the Dodd-Frank Act on the feasibility and desirability of: standardizing credit ratings terminology, so that all credit rating agencies issue credit ratings using identical terms; standardizing the market stress conditions under which ratings are evaluated; requiring a quantitative correspondence between credit ratings and a range of default probabilities and loss expectations under standardized conditions of economic stress; and standardizing credit rating terminology across asset classes, so that named ratings correspond to a standard range of default probabilities and expected losses independent of asset class and issuing entity.

http://lawprofessors.typepad.com/securities/2010/12/sec-requests-public-comment-on-standardizing-credit-ratings-terminology.html

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