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The report draws on the lessons that have been learnt during the credit turmoil on vulnerabilities of ratings of structured finance products. It explores ways to improve the credibility of ratings of structured finance products while highlighting the inevitable uncertainties attached to them and sets out a number of recommendations to address weaknesses that were identified.
While emphasising that credit rating information should support, not replace, investor due diligence, the report provides a number of specific recommendations on how the information provided on ratings of structured finance products can be improved.
The report also includes a summary of the feedback received during a consultation process with credit rating agencies and investors. A number of initiatives to enhance the information provided on structured finance ratings are already under way. In the light of these initiatives, the CGFS will follow up with credit rating agencies and investors on the recommendations made in the report.