“Rating Agencies rate everything and ratings affect all of us" 

—Annette Heuser

Taking On the Big Three Credit Rating Agencies

Prolific Inspectors Rating Scale in Points

"AAA" for 0 - 13 | "BBB" for 14 - 27  | "CCC" for 28 or more

A triple-A rating go out to Senator Al Franken (Democrat of Minnesota) for pursuing tighter rules that would institute more stringent control over the Big Three Credit Rating Agencies ("Big Three"). His unwavering determination and effort spurred on the Security and Exchange Commission (SEC) to officially conduct a feasibility study concerning the potential launch of a public utility company that would oversee Standard & Poor (S&P), Moody’s and the Fitch Group. The implementation of these new rules and tighter control measures coming by way of oversight would promote greater investor protection through education and transparency while staving off or even preventing conflicts of interest.   

Rating Description: Prime Grade Points: 10

A triple-C rating go out to the government for failing the American public. They allowed the Big Three to exist and operate, as an oligopoly for many years past, and thus hold a global market share of 95% of the credit rating business— a form of imperfect competition that grants them considerable leverage to collectively wield immense power over other market players. But power corrupts and absolute power of this magnitude has the potential to corrupt absolutely. It can be catastrophic to the financial growth of the country, and has already resulted in a conflict of interest, as well as little-to-no transparency in the Big Three's past dealings. 

Rating Description: Substantial Risk Grade Points: 42

A triple-A rating go out to Bethany Mclean and Joe Nocera for authoring a powerful book entitled, “All the Devils Are Here, the Hidden History of the Financial Crisis,” where they shed light on the fact that an “erosion of standards, a willful suspension of skepticism, a hunger for big fees and market share, and an inability to stand up to investment banks issuing the securities” was the root cause of the financial crisis (p.111). Especially since, the Big Three Credit Rating Agencies continued to issue triple-A ratings on sub-prime loans that were packaged into mortgage-backed securities, which ultimately defaulted giving way to the bursting of the housing bubble. 

Rating Description: High Grade Grade Points: 13

A triple-C rating go out to the Big Three Credit Rating Agencies for having a hand in on the U.S. housing market crash and financial crisis of 2007- 2010; or worse still, being considered “key enablers of the financial meltdown” by the Financial Crisis Inquiry Commission (FCIC), which was a 10 member commission appointed by the President to examine the root cause of the financial and economic crisis here in the United States and abroad. 

Rating Description: Low Medium  Grade Points: 37

A triple-A rating go out to Annette Heuser, the Executive Director of the German Bertelsmann Foundation for conducting a TED talk and dishing criticism out about the Big Three and their ill-conceived ways of rating the national economies. But more important than that is her vision for launching a prolific International Nonprofit Credit Rating Agency (INCRA). One that serves the public good and shifts the balance of power away from the Big Three. By adding a new nonprofit player into the mix, it would not only increase competition and transparency while creating a more inclusive financial credit rating system, it would indelibly change the game, and thus provide better overall quality and services to the public-at-large. See the TED Talk below.

Rating Description: Prime Grade Points: 5

TED Talk featuring Annette Heuser 

        The 3 Agencies with Power to Make or Break Economies 

Also See: Franken Pursues Tighter Rules for Rating Agencies