Regulating the ratings agencies

Well, that's the proposal, anyway. John Durie isn't convinced. Here's what he sees as the nub of the issue:

The real problem is the inherent conflict of interest in the rating agency model, because the person who wants the rating pays for it.

In the midst of the inquiries into ratings industry, according to The Economist, emails were discovered where one analyst, when asked why he was rating a bit of toilet paper, replied: "We rate everything, even if it is structured by cows we rate it."

If someone will pay you to rate their paper and that's your business, then you rate it.