• Visit Our Network:
  • AFP
  • CTP Certification
  • FP&A Certification
  • AFP Annual Conference
  • CTC
The Resource for the Global Finance Profession
  • Press Room
  • Current Press Releases
  • Press Release Archives
  • 2013
  • 2012
  • 2011
  • 2010
  • 2009
AFP Press Release

AFP Outraged as Fed Begins $1 Billion Bail Out of Rating Agencies

Agencies Should Waive Fees as Restitution to Taxpayer

March 20, 2009 - Bethesda, MD - Credit rating agencies will be collecting huge fees rating bonds the Federal Reserve is buying as part of its latest effort to ease credit and restore confidence in the economy. Despite strong criticism the credit rating agencies have received from Congress, members of the Obama Administration including Treasury Secretary Timothy Geithner, and even the Fed itself, the agencies remain the beneficiaries of incredible government largesse.

According to Jim Kaitz, President and CEO of the Association for Financial Professionals (AFP), "It's outrageous that the credit rating agencies are going to make upwards of a billion dollars rating new debt while those same agencies are culpable for arbitrary and poor quality ratings that resulted in the financial meltdown we have seen over the last year."

"The Fed cannot possibly justify rewarding the credit rating agencies with additional fees," said Kaitz. "The government requires the bonds it buys in this bailout to be Triple-A rated, so the game is already fixed. With little confidence in the current ratings system, the time has come for the Fed to break its addiction to the rating agencies' monopoly."

The membership of AFP includes more than 16,000 financial executives employed by over 5,000 corporations and other organizations. AFP members represent a broad spectrum of financial disciplines and their organizations are drawn generally from the Fortune 1000 and middle-market companies in a wide variety of industries, including manufacturing, retail, energy, financial services, and technology.

Since 2002, AFP has been a vocal advocate for the reform of the credit ratings industry. During that time, AFP conducted two surveys that found that both issuers of corporate debt and investors of corporate cash and pension assets believe: 1) the information provided by credit rating agencies is neither timely nor accurate, 2) the rating agencies are primarily serving the interest of parties other than investors, and 3) the SEC should increase its oversight of rating agencies and takes steps to foster greater competition in the market for credit rating information.

About AFP® 

The Association for Financial Professionals (AFP) serves a network of more than 16,000 treasury and finance professionals. Headquartered in Bethesda, MD, AFP provides members with breaking news, economic research and data on the evolving world of treasury and finance, as well as world-class treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for treasury and finance professionals.

Copyright © 2015 Association for Financial Professionals, Inc. - All rights reserved.
AFP, 4520 East-West Highway, Suite 750, Bethesda, MD 20814, Phone 1.301.907.2862
Follow Us AFP on LinkedInAFP on TwitterAFP on YouTubeAFP Newsfeed