Two amendments that became part of the Senate's Wall Street reform package Thursday promise to alter - and perhaps eliminate - many jobs in the big three credit rating firms.
The provision added at the request of Sen. Al Franken, D-Minn., creates a government-appointed panel "to match rating agencies on a semi-random basis with debt issuers," according to Reuters. "That could ease pressures the agencies face to assign rosy ratings to debt instruments issued by the firms that hire them, backers said."
Of course, it could also eliminate the need for rating firms to employ sales and client service people to court business from issuers. (However, the measure would let issuers hire additional agencies for more ratings if they wanted to.)
A second provision, introduced by Sen. George LeMieux, R-Fla., would require federal regulators to develop their own rating standards, rather than rely solely on rating firms' analyses and conclusions. That change might move the traditional first job in a credit analyst's career path from a stint with a rating firm, to one with a regulatory agency.
The full Senate approved both amendments Thursday. The Senate is expected to approve its final version of the entire reform bill next week.
Rating Agencies Face Curbs [WSJ]
Senate Backs Curbs On Credit Raters, Card Fees [Reuters]
With Banks Under Fire, Some Expect a Settlement [NY Times]
Fraud Charges Aren't Goldman's Only Worry [Motley Fool]
Its enormous trading business could also face headwinds from financial reform legislation and a move away from complicated derivatives securities on the part of "sophisticated" institutional clients.
When Female Networks Aren't Enough [Harvard Business Review]
Star Banker's Ship Comes In [Fortune]
When Buzzwords Take Over Your Company [Cube Rules]
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