Companies will have to rotate the credit-rating firm they use every three years, with a four-year \”cooling off\” period. There will also be constraints on the ability and the type of advisory work that credit rating firms are allowed to provide. As well as forcing agencies to disclose the models, methodologies and key assumptions on which they base their ratings, with annual transparency reports.
If you know what the ratings model is then you can game your offering to fit the ratings model.
Umm, as half of Wall Street did with MBS and CDOs. The man is just entirely a loon.
Rating agencies will be liable for their decisions, potentially sparking expensive lawsuits in civil courts.
How? A rating is an opinion: how can you be legally liable for an opinion?