By requiring a neutral third party to select the rating agency, Congress would significantly improve the quality of bond ratings relied on by small institutions and individual investors. Yet this approach avoids excessive political influence on the ratings process by limiting the government’s role to the minimum necessary to avoid ratings shopping.
Robert Pozen is Chair of MFS Investment Management, which manages over $150 billion in assets. He previously was Vice-Chair of Fidelity Investments. He currently is a senior lecturer at Harvard Business School. He has served in senior positions at public entities such as the SEC and the State of Massachusetts, and was a member of the President's Commission to Strengthen Social Security, and Chairman of the SEC's Advisory Committee on Financial reporting. read more >>