Washington Post Letter to the Editor
Our Honesty in Rating Debt
David Ignatius's Sept. 27 column, "Markets' World of Worry," unfairly questioned the integrity of credit rating agencies.
Standard & Poor's has been rating residential mortgage-backed securities for 30 years and has developed industry-leading processes for evaluating their creditworthiness. As a result, S&P has an excellent record of assessing default risk on these securities: Four one-hundredths of 1 percent of our AAA-rated transactions have defaulted in 30 years.
Skeptics such as Mr. Ignatius question whether, in pursuit of fees, rating agencies give higher ratings than they otherwise would. There is no evidence -- none at all -- to support this contention with respect to S&P.
Furthermore, such a claim ignores the fact that our business model allows S&P to make more than 1 million ratings publicly available without charge, which fosters transparency and the free flow of information.
Our reputation is our most valuable long-term asset, which would make it imprudent for us to provide anything other than fair and independent ratings. Our criteria are publicly available and consistently applied. And we have refused to rate whole categories of transactions that do not meet our criteria.
We are always looking to enhance our processes and analytics -- and have been taking steps to do just that -- so we can continue to serve the interests of the capital markets with ratings that are available free to all.
Vickie Tillman
Executive Vice President
Credit Market Services
Standard & Poor's
New York