In his opening statement Chairman Randy Neugebauer voiced strong objections to various provisions of the new financial reform law. Neugebauer said the big three credit-rating agencies continued to conduct business as in the past when they inflated grades on toxic mortgage products that fueled the 2008 financial crisis. Subcommittee Ranking Member Mike Capuano thought the credit rating agencies were more vigilant, but he pushed regulators on their work to develop an alternative to the current system.
The federal regulators on the first panel represented the Securities and Exchange Commission, the Federal Reserve and the Comptroller of the Currency. Each admitted progress was slow in the development of alternative systems.
The second panel featured Standard & Poor’s President Deven Sharma, and officials from other firms that either produce or widely use credit ratings. A lively discussion on whether credit-rating agencies should change their measuring practices yielded no consensus.