We need a new batch of bank regulators
Sir these days the credit rating agencies are getting pounded on, as they should be, for instance as described by Joanne Chung and Michael Mackenzie in “SEC sees conflicts of interest at rating agencies” July 8, but the really frightening issue is how on earth we landed ourselves some bank regulators that trusted so much the credit rating agencies.
No matter what you believe the credit rating agencies they do not even intend to look into the future, they just extend the past into the future, and so they do not even purport their ratings to be correct, and besides that they are manned by humans and therefore bound to err.
But all that did not stopped the regulators from assigning to the credit ratings agencies the role as supreme risk overseers and by doing so reinforcing the beliefs of all those who wanted to believe that the future is manageable. And, like lemmings, the market followed the officially endorsed credit rating agencies over a precipice, and will do so over and over again. Is it not high time to get us a new batch of bank regulators, some that are more knowledgeable of the very basic facts of life?
No matter what you believe the credit rating agencies they do not even intend to look into the future, they just extend the past into the future, and so they do not even purport their ratings to be correct, and besides that they are manned by humans and therefore bound to err.
But all that did not stopped the regulators from assigning to the credit ratings agencies the role as supreme risk overseers and by doing so reinforcing the beliefs of all those who wanted to believe that the future is manageable. And, like lemmings, the market followed the officially endorsed credit rating agencies over a precipice, and will do so over and over again. Is it not high time to get us a new batch of bank regulators, some that are more knowledgeable of the very basic facts of life?
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