These people have the power to wipe out a trillion dollars in wealth just by changing a rating. Yet they are balking at an SEC requirement that they disclose errors in their calculations–claiming they can police themselves. This quotation says it all:
Barbara Roper, director of investor protection for the Consumer Federation of America, said that [Standard & Poor’s internal correction policy] has proven inadequate.
“What was their correction policy on their Enron rating? What was their correction policy on their Lehman rating? What was their correction policy on their Bear Stearns rating? They don’t have an error correction policy — they have an error denial policy, and the SEC is absolutely right to step in,” Roper said.
Revealingly, the other two top ratings agencies–Fitch, and Moody’s–don’t have the same problem with the proposed SEC policy of disclosing rating agency errors.
Read more here.