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STORY: UN / CREDIT RATING
TRT: 2.14
SOURCE: UNTV
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 10 SEPTEMBER 2013, NEW YORK CITY / FILE
RECENT, NEW YORK CITY
1. Wide shot, exterior United Nations Headquarters
5 SEPTEMBER 2013, NEW YORK CITY / FILE
2. Wide shot, Trusteeship Council
SOUNDBITE (English) Paul Taylor, President and Chief Executive Officer, Fitch Ratings:
“In the heat of market activity leading up to the financial crisis, many market participants chose to forget or simply ignore the limitations of ratings. Some where simply unaware and we, the rating agencies, did not do enough to highlight the limitations of our product nor flesh out fully the rationale for our opinions. However rating can and should provide a robust forward looking indication of relative credit risk. As you are all aware, in recent years credit rating agencies experienced considerable negative publicity and often been the subject of very disparaging views.”
3. Med shot, delegates
SOUNDBITE (English) Stephen Pagliuca, Managing Director Bain Capital:
“The mistakes present in many risk models for structured products exacerbated the effects of the financial crisis of 2008. Since 2008 steps have been taken to improve the transparency of regulations with respect to rating of structured products. Ratings agencies now publish underlining data on public websites, allowing other agencies and individual investors to run their own analysis. Specialty data providers have emerged to offer additional perspective on the risk inherent on some of the highly specialized forms of credit. The ratings agencies have continued to refine their own models and created specialized teams that focus on structured products. They have also tightened their conflict policies with respect to risk analysis, I think you heard some of that today already, and I expect as structured finance continues to grow, the agencies will refine their own ability to provide investors with timely and relevant risk assessment tools.”
4. Wide shot, dais
5. SOUNDBITE (English) Douglas Peterson, President of Standard and Poors Rating Services:
“We like others did not anticipate the US housing downturn which led to the financial crisis, but with the exception of our ratings on US mortgage related securities our ratings have performed as expected. Comparable transparent and forward looking ratings serve the capital markets by contributing to their efficiency and stability, but while ratings are important, they are certainly not the only source of information available to the credit markets. Investors draw on many different sources, including their own analysis, other research houses and local rating agencies.”
6. Wide shot, dais
The President and chief executive officer for Fitch Ratings, Paul Taylor, said today (10 September) that rating agencies, “did not do enough to highlight the limitations of our product nor flesh out fully the rationale for our opinions” leading up to the 2008 housing downturn and financial crisis.
Taylor, who was addressing a General Assembly Thematic Debate on “The role of Credit Rating Agencies in the International Financial System,” said that “in the heat of market activity leading up to the financial crisis, many market participants chose to forget or simply ignore the limitations of ratings”
The chief executive said that despite “negative publicity” and “disparaging views” credit rating “can and should provide a robust forward looking indication of relative credit risk.”
Also addressing the General Assembly, Stephen Pagliuca, managing director at Bain Capital, said “the mistakes present in many risk models for structured products exacerbated the effects of the financial crisis of 2008.”
Pagliuca pointed out that “since 2008 steps have been taken to improve the transparency of regulations with respect to rating of structured products.”
Douglas Peterson, President of Standard and Poors Rating Services said that they “like others did not anticipate the US housing downturn which led to the financial crisis, but with the exception of our ratings on US mortgage related securities our ratings have performed as expected.”
He added that “comparable transparent and forward looking ratings serve the capital markets by contributing to their efficiency and stability, but while ratings are important, they are certainly not the only source of information available to the credit markets. Investors draw on many different sources, including their own analysis, other research houses and local rating agencies.”
