Credit rating agencies are generally accurate but the divisions that rated sub-prime mortgages were certainly not up to par at the major agencies.
One way to solve the lack of any problems we may have had with credit ratings in the past, is to allow competition among such services.
Why not allow any company who feels qualified to register as a ratings analyst? Today, a small handful has a government monopoly.
If a company can show the Securities and Exchange Commission that it has qualified analysts and capability to evaluate bonds and other securities, why not have a license?
Another problem: Do credit rating companies have First Amendment free speech immunity? Courts have ruled they have but plaintiff lawyers are always on the prowl. ( See the Earl J Weinreb NewsHole® comments.)
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