Remarks by Chairman Mary Jo White and Commissioner Luis Aguilar at SEC Roundtable on How to Change the Current Credit Ratings System

At the SEC roundtable on credit ratings, Chairman Mary Jo White delivered opening remarks emphasizing the critical "gatekeeper" role played in the debt market by NRSROs and the impact of credit ratings on the economy. Commissioner Aguilar discussed the importance of improving the credit ratings system.

Chairman White reiterated that the roundtable is dedicated to allowing all sides to discuss possible regulatory or statutory changes to the current model subsequent to the SEC requesting public comment on the issue.

In his remarks, Commissioner Aguilar went on to discuss studies which have found that inflated credit ratings, among other factors, contributed to the financial crisis by masking the true risk of many mortgage-related securities. One of the key concerns he discussed was the issue of conflicts of interest associated with the "issuer-pays" model, which encourages ratings shopping and places undue pressure on NRSROs to give favorable ratings. He urged the establishment of transparent and orderly processes to ensure that a product will receive the appropriate rating level commensurate with its risk.

See: Chairman White's Remarks and Commissioner Aguilar's Remarks.