Ben T. Smith IV, a longtime Silicon Valley executive and currently head of the Communications, Media and Technology practice at Kearney, speaks to Global Finance about the post-SVB venture capital industry and the pace of innovation.
Many of the world's richest countries are also the world's smallest: the pandemic and the global economic slowdown barely made a dent in their huge wealth.
Global Finance editor Andrea Fiano interviews Ásgeir Jónsson, Central Bank Governor of Iceland during Global Finance's World's Best Bank Awards at the National Press Club in Washington, DC on October 15th.
More than six years after the housing market crashed—dragging the world economy and stock markets down with it—Standard & Poor’s settled in early February with the Securities and Exchange Commission for its alleged part in triggering the meltdown. The price was relatively cheap, as these things go: $1.4 billion with no admission of wrongdoing.
Some media outlets questioned whether justice was done. But a bigger question looms: Will the much-publicized settlement change the rules of engagement between raters and corporate issuers of bonds, as well as the investors who buy them?
For companies, the answer appears to be no. Despite ugly publicity and embarrassing legal settlements that have tarred the credit rating players after the financial crash, the industry remains structured as before. Legislators and regulators have done little to reform it.
Borrowers still pay rating agencies like McGraw-Hill’s S&P, Fitch Ratings and Moody’s Investors Service to assess the creditworthiness of their bonds. That’s the same setup that enabled bond issuers and mortgage obligation repackagers to receive jacked-up credit ratings in the run-up to the Great Recession.
And while smaller outfits, including Kroll Bond Rating Agency, have gained some traction in the industry of late, S&P, Moody’s and Fitch still dominate the business. The Big Three issue well over 90% of all credit ratings in the US—a telltale figure.
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