S&P is first to detail reform proposals

All three major rating agencies are engaged in intensive reviews of their internal processes, in the face of rising regulatory pressure and investor anger. However, Standard & Poor’s is the first to release a detailed reform plan, with 27 action points, focused on four main areas:

● The agency will reform its governance procedures to counter suggestions that the ratings agencies are prone to conflicts of interest. It will appoint an outside ombudsman; use an external firm to review compliance and publish the results; rotate analysts to prevent them from becoming unhealthily close to clients; and study the track record of analysts who leave to work for issuers to check for unusual patterns.