DID II SAY THAT? - What We Said About Rating Agencies

OCTOBER 1995 -- As U.S. rating agencies expanded rapidly at home and abroad, the Securities and Exchange Commission sought public comment on what should be done. Institutional Investor asked: "Can credit rating agencies maintain their standards in an era of fierce competition and perplexing financial products?" A rhetorical question perhaps, but the magazine at least knew where to look for trouble. "Structured finance is where the agencies are now engaged in bare-knuckle brawling for market share," we wrote. "If there is a cause for concern that commercial pressures are coming to affect standards, it must be in this fastest growing and most profitable sector." Moody's Investor Service came under fire in the article for providing unsolicited ratings -- a practice a competitor described as "tantamount to blackmail." The agency has since discontinued the practice.