The Bank for International Settlements is today releasing the latest report
from the Committee on the Global Financial System (CGFS)1 entitled The role of
ratings in structured finance: issues and implications. The report
highlights several of the characteristics of structured products, challenges
arising for the rating agencies and other market participants, and implications
for central banks and investors. It is now available on the BIS website at
www.bis.org.
The report has been prepared by the CGFS Working Group on ratings in
structured finance, established to explore the role of rating agencies in the
rapidly evolving markets for structured finance instruments. To facilitate a
better understanding of this role and of structured finance markets more
broadly, the Working Group has sought to identify and explain methodological
differences that exist between the rating of structured finance instruments and
more traditional credit products. Furthermore, the Group explored the various
methodological and organisational challenges involved in rating structured
finance products.
Documenting the Working Group’s findings, the report complements
earlier work by the CGFS and other official forums, such as the Joint Forum. The
Working Group comprised representatives of 16 CGFS-participating central banks
and the BIS and was chaired by Peter Praet of the National Bank of Belgium. The
Working Group’s members are listed in the report.
Specific questions regarding the report may be sent to the CGFS by e-mail
(Service.GFSCommittee@bis.org) or fax (+41 61 280 9100). For further information
or to request a printed copy, please phone the press enquiries number given
above.
1 The Committee on the Global
Financial System is a central bank forum established by the Governors of the G10
central banks to monitor and examine broad issues relating to financial markets
and systems. Its mandate is to elaborate appropriate policy recommendations to
support central banks in the fulfilment of their responsibilities with regard to
monetary and financial stability. The Committee is chaired by Roger W Ferguson
Jr, Vice Chairman of the Board of Governors of the Federal Reserve System.